ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

OR

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to
________

Commission file number: 000-53012

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

(Exact name of registrant as specified in
its charter)

Delaware

90-0687379

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

709 S. Harbor City Blvd., Suite 250, Melbourne, FL

32901

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including
area code (321) 725-0090

Securities registered pursuant to Section
12(b) of the Act:

Title of each class

Name of each exchange on which registered

N/A

N/A

Securities registered pursuant to Section
12(g) of the Act:
Common Stock, par value $0.001 per share

Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨
No x

Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨
No x

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.

Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The aggregate market value of the voting
and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold
as of the last business day of the registrant's most recently completed second fiscal quarter was $18,312,622.

As of April 10, 2015, there were 18,432,055 shares of
common stock, par value $0.001 per share, outstanding.

This report may contain
forward-looking statements within the meaning of Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, or the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking state to all
comments are based on our management's beliefs and assumptions and on information currently available to our management and involve
risks and uncertainties. Forward-looking statements include statements regarding our plans, strategies, objectives, expectations
and intentions, which are subject to change at any time at our discretion. Forward-looking statements include our assessment, from
time to time of our competitive position, the industry environment, potential growth opportunities and the effects of regulation.
Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,”
“believes,” “could,” “estimates,” “expects,” “hopes,” “intends,”
“may,” “plans,” “potential,” “predicts,” “projects,” “should,”
“will,” “would” or similar expressions.

Forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements
to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, you should not place
undue reliance on these forward-looking statements. Also, forward-looking statements represent our management's beliefs and assumptions
only as of the date of this report. You should read this report and the documents that we reference in this report and have filed
as exhibits to the report completely and with the understanding that our actual future results may be materially different from
what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update
the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information
becomes available in the future.

ITEM 1. BUSINESS

Overview

First Choice Healthcare
Solutions, Inc. (“FCHS,” “the Company,” “we,” “our” or “us”) is engaged
in the creation of state-of the-art, multi-specialty “Medical Centers of Excellence” in select markets primarily in
the southeastern United States. We intend to own, operate and manage these “Medical Centers of Excellence” under the
FCHS brand.

We believe by integrating
the synergistic mix of orthopaedic, neurology and interventional pain specialties with related diagnostic and ancillary services
and state-of-the-art equipment and technologies all in one location or “Medical Center of Excellence,” we are able
to:

We currently own and
operate First Choice Medical Group of Brevard, LLC (“FCMG”), our model multi-specialty Medical Center of Excellence.
FCMG will serve as the model for replicating our “Medical Center of Excellence” strategy in our target expansion markets.
Located in Melbourne, Florida, FCMG specializes in the delivery of musculoskeletal medicine, via our strategically aligned subspecialties
in orthopaedic, neurology and interventional services, including MRI, X-ray, DME and rehabilitative care with multiple quality-focused
goals centered on enriching our patients’ care experiences.

3

Our Real Estate Business

FCID Holdings, Inc.
(“FCID Holdings”) is our wholly owned subsidiary which operates our real estate interests. Currently, FCID Holdings
has one real estate holding, Marina Towers, LLC, a 78,000 square feet, Class A, six story building located on Indian River in Melbourne,
Florida. In addition to housing our corporate headquarters and FCMG, the building which averages 95% annual occupancy, also leases
approximately 48,698 square feet of commercial office space to third party tenants.

History

We were incorporated
in the State of Colorado on May 30, 2007 to act as a holding corporation for I.V. Services Ltd., Inc. (“IVS”), a Florida
corporation engaged in providing billing services to providers of medical services. IVS was incorporated in the State of Florida
on September 28, 1987, and on June 30, 2007, 2,429,000 common shares were issued to Mr. Michael West and other IVS shareholders
in exchange for 100% of the capital stock of IVS. In the second quarter of 2011, we disposed of IVS, which, at the time, was an
inactive, wholly-owned subsidiary of the Company. The consideration for the disposition was the net liability assumption by the
purchaser.

On December 29, 2010,
we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with FCID Medical, Inc., a Florida corporation
(“FCID Medical”) and FCID Holdings, Inc., a Florida corporation (“FCID Holdings)”, which together will
be referred to herein with FCID Medical as “FCID”, and the shareholders of FCID (the “FCID Shareholders”).
Pursuant to the terms of the Share Exchange Agreement, the FCID Shareholders exchanged 100% of the outstanding common stock of
FCID for a total of 10,000,000 common shares of the Company, resulting in FCID Medical and FCID Holdings being 100% owned subsidiaries
of the Company (the “Share Exchange”).

On or about February
13, 2012, we obtained stockholder consent for (i) the approval of an agreement and plan of merger (the “Merger Agreement”)
with First Choice Healthcare Solutions, Inc., (“FCHS Delaware”), a Delaware corporation formed exclusively for the
purpose of merging with the Company, pursuant to which (a) the Company's state of incorporation changed from Colorado to Delaware
(the “Reincorporation”) (b) the Company's name changed from Medical Billing Assistance, Inc. to First Choice Healthcare
Solutions, Inc. (the “Name Change”), (c) every four shares of Company's common stock was exchanged for one share of
FCHS Delaware common stock (effectively resulting in a four-to-one reverse split of the Company's common stock) (the “Reverse
Split”), and (d) FCHS Delaware inherited the rights and property of the Company and assumed the liabilities of the Company
and (ii) the approval of the Medical Billing Assistance, Inc. 2011 Incentive Stock Plan. The effective date for the Reincorporation
and the Reverse Split was April 4, 2012. The Company changed its name to be more closely aligned with its target market.

We operate in two segments,
healthcare services and real estate through five wholly-owned subsidiaries:

·

FCID Medical, Inc. (“FCID Medical”), which is the subsidiary under which all of our
Medical Centers of Excellence are and will be owned and operated. First Choice Medical Group of Brevard, LLC is our Medical Center
of Excellence and is located in Melbourne, Florida. First Choice Medical Group is our model multi-specialty Medical Center of Excellence
and is wholly-owned and operated by FCID Medical.

·

FCID Holdings, Inc. (“FCID Holdings”) operates Marina Towers, a 78,000 square foot,
Class A, six-story building located on the Indian River in Melbourne, Florida. Marina Towers is owned by Marina Towers, LLC, a
subsidiary owned by FCID Holdings (99%) and MTMC of Melbourne, Inc. (1%).

Our goal is
to build a network of non-physician and physician owned and operated Medical Centers of Excellence in diverse locations,
primarily throughout the Southeastern United States. By centralizing current and future centers’ business management
functions, including call center operations, scheduling, billing, compliance, accounting, marketing, advertising, legal,
information technology and record-keeping at our corporate headquarters, we will maintain efficiencies and economies of
scale. We believe our structure will enable our staff physicians to focus on the practice of medicine and the delivery of
quality care to the patients we serve, as opposed to having their time and attention focused on business administration
responsibilities.

4

Our Healthcare Services
Business

We own and operate
First Choice Medical Group of Brevard, LLC (“FCMG”), a multi-specialty medical center in Melbourne, Florida. FCMG is
our model multi-specialty Medical Center of Excellence and specializes in the delivery of musculoskeletal medicine, diagnostic
services and rehabilitative care.

Using FCMG as a model,
we plan to create world-class, state-of-the-art Medical Centers of Excellence committed to delivering patient-centric care in select
U.S. markets.

FCID Medical, Inc.

FCID Medical is our
wholly-owned subsidiary under which all of our Medical Centers of Excellence will be owned and operated. FCID Medical independently
managed FCMG from November 2011 until April 2012 when we acquired FCMG as a subsidiary. Since acquiring FCMG, we
have succeeded in increasing monthly patient visits, improving management of account payables/receivables, and expanding the number
of physicians and care specialists on staff.

First Choice Medical
Group of Brevard, LLC

Based in Melbourne,
Florida, FCMG is our model multi-specialty Medical Center of Excellence. The Center specializes in the delivery of musculoskeletal
medicine, diagnostic services and rehabilitative care with multiple quality-focused goals centered on enriching patient care experiences.
Our physicians and care specialists are recruited and retained with an emphasis on best practices and attitude: being committed
to meeting and exceeding the needs of patients and their families. Moreover, all employees of FCMG, from the receptionists to the
doctors, are considered caregivers who put the patient first. All caregivers cooperate with one another with a common focus on
the best interests and personal goals of each patient. Unique to FCMG, we also consider families and friends of patients to be
vital components of the care team.

Care is focused on
each patient’s full continuum of care, which requires a more personalized approach to treatment. It is the mission of our
team to customize care to ensure that each patient’s needs, values and choices are always considered, which squarely aligns
with our purpose of “transforming healthcare delivery, one patient at a time.”

FIRST CHOICE MEDICAL
GROUP’S PATIENT-CENTRIC CARE DELIVERY MODEL

Our caregivers listen
to and honor the perspectives and choices of patients and their families. Moreover, our caregivers communicate and share complete
and unbiased information with patients and families in ways that are affirming and useful in decision-making processes. Our care
delivery practices exemplify the very definition of patient-centric care, explicitly recognizing the importance of human interaction
in terms of personalized care, kindness and being `present' with patients.

5

FCMG's patient-centric
culture strives to include providing an inviting, easily accessible, peaceful, healing environment that is aesthetically pleasing
and designed specifically to allay patient fear, anxiety and discomfort. The design and decor of FCMG's lobby and diagnostic and
treatment areas are intended to define and reinforce a strong and relevant brand image of quality, patient-centered care.

FCMG also engages the
most advanced diagnostic technologies coupled with the latest in individualized care, including trigger point injections and pharmacological,
physical, neurological, orthopedic, chiropractic and massage therapy treatments. Our care facilities house both a digital GE X-Ray
system and a GE 450 MRI Gem Suite system, which is physically positioned to capitalize on the expansive waterfront view of the
Indian River, promoting patient relaxation and soothing fear and anxiety.

Our
physicians currently have hospital and surgical privileges at several hospitals serving Brevard County, Florida, including
Health First, Inc., Melbourne Same-Day Surgery Center and SCA Surgery Center. Patients at
FCMG are seen by physicians and care specialists who are our employees, not contractors; and patient clinical care and
approach to treatment is well coordinated across a patient's full care continuum.

Our Definition
of a “Medical Center of Excellence”

As there are
numerous definitions of a “Medical Center of Excellence,” we have strictly defined what we believe is qualified
as a “Medical Center of Excellence” to ensure that our high standards for patient care and attention can be
fostered and preserved. More specifically, each of our Medical Centers of Excellence will:

·

be approximately eight to ten specialty physicians —all of whom are subject to our rigorous
qualification and hiring process;

·

provide for the combination of synergistic medical disciplines in orthopaedics, neurology and interventional
pain medicine, while supported by related in-house diagnostic and ancillary services, including, but not limited to MRI, X-ray,
DME and PT using advanced technologies;

·

be capable of generating estimated annual revenue of $20 to $30 million when operating at full
capacity,
based on
current
reimbursement rates;

·

be housed in a commercial building, in close geographic proximity to a primary hospital(s); and

Because we believe
in ideals relating to optimal patient experience of care, we continually reinforce the importance of hiring, training, evaluating,
compensating and supporting a workforce committed to patient-centered care. Just as vital, we engage our employees in all aspects
of process design and treat them with the same dignity and respect that they are expected to show patients and family members.
Central to our long term growth strategy is attracting and recruiting top tier physicians and care specialists that rank in the
top percentile of performance in the local markets we serve; and creating a work environment and corporate culture that serves
to engage, motivate and retain them.

Due to sweeping healthcare
reform, increased regulatory and reimbursement mandates and the financial challenges each of these impose, remaining in private
practice is quickly losing its appeal for many physicians. In fact, according to a nationwide survey published in 2013 by recruiting
firm Jackson Healthcare, one-third of U.S. physicians plan to leave private medical practice within the next ten years in favor
of employment by hospitals and multi-specialty medical groups. Thus, the opportunity for our Company to attract key medical talent
has never been more robust.

Our systems of operation
unburden our physicians from business administration responsibilities associated with operating a medical practice or clinic. More
specifically, we believe that physicians will choose employment with us because we can offer advantages and benefits such as being
able to focus exclusively on delivering excellent patient care; higher income potential; freedom from day-to-day practice administration,
including marketing and generating new patient leads; access to state-of-the-art technology, diagnostics and services; and camaraderie
and collaboration with a cadre of first-rate caregivers dedicated to common, patient-centered goals and objectives. The requirements
for running the day-to-day business functions of the Centers are the sole responsibility of our management team —and not
the physicians. Simply put, doctors get to be doctors.

6

Currently, we are actively
engaged in identifying and pursuing discussions with prospective physicians in our key target markets —with those being primarily
in the Southeastern United States. We anticipate investing $4-5 million to create one or more Medical Centers of Excellence during
the next 12 months; and each Center may require up to 6-12 months to achieve optimal economic capacity, depending on the number
of physicians and physician assistants to be employed, the medical service mix and the type of diagnostic and ancillary services
to be offered. However, there can be no assurance that we will be able to negotiate
acceptable terms for, or find suitable candidates for, such positions.

Our Strategy

We aim to distinguish
our Medical Centers of Excellence from our competition by designing our Centers as premier destinations for clinically superior,
patient-centric care that is coordinated across a patient’s entire care continuum. By doing so, we expect to deliver more
meaningful and collaborative doctor-patient experiences, more accurate diagnoses due to the care coordination, effective treatment
plans, faster recoveries and materially reduced costs. Our strategic focus is to grow primarily in select southeastern and western
U.S. markets by hiring additional physicians to create FCHS-branded Medical Centers of Excellence that fit our defined criteria.
Our criteria includes the following:

opportunities that support economies of scale in billing, collections, purchasing, advertising
and compliance which can be fully leveraged to reduce expenses and fuel income growth; and

·

opportunities to increase awareness of our brand by aligning with patients, referring physicians,
medical institutions, insurers, employers and other healthcare stakeholders in local markets that share our values of patient care.

Our business model
is to employ all of our multi-specialty physicians, thereby permitting us to optimize revenue generation from both physician and
ancillary services, while also providing our employed care providers with the ability to refer patients to our on-site diagnostic
services. Physician-owned practices, on the other hand, may be subject to prevailing federal regulations (e.g., The Ethics in Patient
Referral Act of 1989, as amended), which may limit their ability to refer patients for certain healthcare services provided by
entities in which a physician-owner(s) has a financial interest.

Our centralized system
of back office operations will allow us to achieve measurable cost and productivity efficiencies as we expand the number of Centers
we own and operate. We have specifically designed our centralized system to alleviate our staff physicians from business administration
responsibilities associated with operating a medical practice or clinic, enabling them to focus on caring for the patients we serve.
Physicians who own and manage their own private practices or clinics typically have to devote valuable time and resources to addressing
business concerns, time and resources that might otherwise be spent on treating their patients.

Medical Service Mix

Like other business
models for professional medical services, our Medical Center of Excellence model is designed to offer the most synergistic and
profitable medical service mix. By their nature, some combinations of medical specialties can generate more revenue than others.
Physicians need access to diagnostic equipment and ancillary services, such as MRI, X-ray, DME and PT. Moreover, patients expect
their physicians to have access to the best diagnostic and service delivery equipment. Without diagnostic services, many medical
practices will find it difficult to maintain their current margins of profitability.

We integrate both medical
specialties and diagnostic services in our Centers to maintain or enhance our profits. While one specialty may have high reimbursements
for their professional services but insufficient volume to profitably support the necessary diagnostic equipment, another medical
specialty may have a lower professional service reimbursements but high volume of diagnostic equipment use. Operating independently,
each specialty group would face retreating profit margins and confront significant challenges to maintaining high service levels
with adequate equipment and advanced technologies. However, operating together, they create the optimal mix of professional service
fee income and diagnostic equipment procedure income. Since the combination is more profitable than either of its components, there
is a favorable opportunity to sustain profit margins that will allow each Center to maintain high service levels with state-of-the-art
equipment.

7

Scalable Back Office and Economies
of Scale

Fixed cost legacy administrative
functions have subjected many established medical centers to a downward spiral of diminishing profit margins and losses. In legacy
medical centers, administrative management, billing, compliance, accounting, marketing, advertising, scheduling, customer service
and record keeping functions represent fixed overhead for the practice. The fixed administrative overhead of a practice has the
effect of reducing profit margins if the practice experiences declining revenues as a result of lower patient volumes from increasing
competition, lower pricing, lower reimbursements or patient migration to competitors.

A key to our success
will be our ability to continue to employ a highly experienced team of business managers supported by an array of professional,
experienced and compliant subcontractors. Using project management best practices, our corporate team managers all billing, compliance,
accounting, marketing, advertising, legal, information technology and record keeping functions on behalf of FCMG. It is our plan
that the cost of our “back office operations” will not increase in direct relation to the growth of our Medical Centers
of Excellence, which will allow us to sustain profit margins across our entire business operations with a cost effective and scalable
back office. As the number of employed physicians and operated Medical Centers of Excellence increases, the economies of scale
for our back office operations will also increase. The economies of scale support selecting the best and not the lowest cost subcontractors,
while allowing FCMG and our other future Medical Centers of Excellence to operate cost effectively with higher service levels.

Specifically, we currently
provide all of the administrative services necessary to support the practice of medicine by our physicians and improve operating
efficiencies of FCMG and our future Medical Centers of Excellence:

•

Recruiting and Credentialing. We have proven experience in locating, qualifying,
recruiting and retaining experienced physicians. In addition to the verification of credentials, licenses and references of all
prospective physician candidates, each caregiver undergoes Level Two Background Checks. We maintain a national database of practicing
physicians. In addition to our database of physicians, we recruit locally through trade advertising, the American Academy of Orthopaedic
Surgeons and referrals from our physicians.

•

Billing, Collection and Reimbursement. We assume responsibility for contracting with
third-party payors for all of our physicians; and we are responsible for billing, collection and reimbursement for services rendered
by our physicians. In all instances, however, we do not assume responsibility for charges relating to services provided by hospitals
or other referring physicians with whom we collaborate. Such charges are billed and collected separately by the hospitals or other
physicians. The majority of our third party payors remit by EFT and wire transfers. Accordingly, every aspect of the business is
positioned to achieve high productivity and lower administrative headcounts and per capita expense. We provide our physicians with
a training curriculum that emphasizes detailed documentation of and proper coding protocol for all procedures performed and services
provided, and we provide comprehensive internal auditing processes, all of which are designed to achieve appropriate coding, billing
and collection of revenue for physician services. All of our billing and collection operations are controlled and will continue
to be controlled from our business offices located at our corporate headquarters in Melbourne, Florida.

•

Risk Management and Other Services. We maintain a risk management program focused
on reducing risk, including the identification and communication of potential risk areas to our medical staff. We maintain professional
liability coverage for our group of healthcare professionals. Through our risk management staff, we conduct risk management programs
for loss prevention and early intervention in order to prevent or minimize professional liability claims. In addition, we provide
a multi-faceted compliance program that is designed to assist our multi-specialty Medical Centers of Excellence in complying with
increasingly complex laws and regulations. We also manage all information technology, facilities management, legal support, marketing
support, regulatory compliance and other services.

Developing and operating
additional multi-specialty Medical Centers of Excellence in other geographic areas will take advantage of the economies of scale
for our administrative back office functions. Our business development plan calls for opening up multiple Centers in multiple states
and cities at a pace that will allow us to maintain the same levels of quality and acceptable profitability from each location.
We believe that the scalable structure of our administrative back office functions will efficiently support our expansion plans.

Successful retail models
in other industries already effectively use telecommunications, remote computing, mobile computing, cloud computing, virtual networks
and other leading-edge technologies to manage geographically diverse operating units. These technologies create the infrastructure
to allow a central management team to monitor, direct and control geographically dispersed operating units and subcontractors,
including national operations.

We believe that our
business model incorporates the best of these technologies. A central management team monitors, directs and controls FCMG, and
will control our future multi-specialty Medical Centers of Excellence as well as the necessary support subcontractors required
by the operations. Our administrative operations are centered on a secure paperless practice management platform. We utilize a
state-of-the-art, cloud-based electronic medical record (“EMR”) management system, which provides ready access to each
patient’s test results from anywhere in the world where there is internet connectivity, including X-ray and MRI images, diagnosis,
patient and doctor notes, visit reports, billing information, insurance coverage, patient identification and personalized care
delivery requirements. Our EMR system fully complies with Meaningful Use standards defined by the Centers for Medicare
& Medicaid Services Incentive Programs. These programs govern the use of electronic health records and allow us to earn incentive
payments from the U.S. government, pursuant to the Health Information Technology for Economic and Clinical Health (HITECH) Act,
which was enacted as part of the American Recovery and Reinvestment Act of 2009.

We intend to
grow by replicating our model, currently in place at FCMG, in other geographic markets, and by hiring and managing additional
physicians to serve patients in our current and future Medical Centers of Excellence - all of which will be supported by our
standardized policies, procedures and clinic setup guidelines. We believe our administrative functions can be quickly scaled
to handle multiple additional Centers and/or physicians. As we rollout our business model, we expect our administrative core
and clinic retail model will assist us in maintaining economies of scale for all of our multi-specialty Medical Centers
of Excellence.

Referral and Partnering Relationships,

Our business model
is influenced by the direct contact and daily interaction that our physicians have with their patients, and emphasizes a patient-centric,
shared clinical approach that also serves to address the needs of our various “partners,” including hospitals, third-party
payors, referring physicians, our physicians and, most importantly, our patients. Our relationships with our partners are important
to our continued success.

Hospitals

Our relationships with
our hospital partners are critical to our operations. We work with our hospital partners to market our services to referring physicians,
an important source of hospital admissions, within the communities served by those hospitals. In addition, a majority of our physicians
maintain regular hospital privileges, to ensure best in class is available to our
patients and the community. Under our contracts with hospitals, we are responsible for billing patients and third-party payors
for services rendered by our physicians separately from other related charges billed by the hospital or other physicians within
the hospital to the same payors.

Third-Party Payors

Our relationships with
government-sponsored plans, including Medicare and TRICARE, managed care organizations and commercial health insurance payors are
vital to our business. We seek to maintain professional working relationships with our third-party payors, streamline the administrative
process of billing and collection, and assist our patients and their families in understanding their health insurance coverage
and any balances due for co-payments, co-insurance, deductibles or out-of-network benefit limitations. In addition, through our
quality initiatives and continuing research and education efforts, we have sought to enhance clinical care provided to patients,
which we believe benefits third-party payors by contributing to improved patient outcomes and reduced long-term health system costs.

We receive compensation
for professional services provided by our physicians to patients based upon rates for specific services provided, principally from
third-party payors. Our billed charges are substantially the same for all parties in a particular geographic area, regardless of
the party responsible for paying the bill for our services. Approximately one-third of our net patient service revenue is received
from government-sponsored plans, principally Medicare and TRICARE programs.

9

Medicare is a health
insurance program primarily for individuals 65 years of age and older, certain younger people with disabilities and people with
end-stage renal disease. The program is provided without regard to income or assets and offers beneficiaries different ways to
obtain their medical benefits. The most common option selected today by Medicare beneficiaries is the traditional fee-for-service
payment system. The other options include managed care, preferred provider organizations, private fee-for-service and specialty
plans. TRICARE is the healthcare program for U.S. military service members (active, Guard/Reserve and retired) and their families
around the world. TRICARE is managed by the Defense Health Agency under leadership of the Assistant Secretary of Defense. Both
Medicare and TRICARE compensation rates are generally lower in comparison to commercial health plans. In order to participate in
government programs, our Medical Centers of Excellence must comply with stringent and often complex enrollment and reimbursement
requirements.

We also receive compensation
pursuant to contracts with commercial payors that offer a wide variety of health insurance products, such as health maintenance
organizations, preferred provider organizations and exclusive provider organizations that are subject to various state laws and
regulations, as well as self-insured organizations subject to federal Employee Retirement Income Security Act (“ERISA”)
requirements. We seek to secure mutually agreeable contracts with payors that enable our physicians to be listed as in-network
participants within the payors' provider networks

We charge
our standard rates to all patients and adjust our collections based on our contractual agreements with the insurance payors.
If payment is less than billed charges, we bill the balance to the patient, subject to state and federal laws regulating such
billing. Although we maintain standard billing and collections procedures, we also provide discounts and/or payment option
plans in certain hardship situations where patients and their families do not have financial resources necessary to pay the
amount due at the time services are rendered. Any amounts written-off related to private-pay patients are based on
the specific facts and circumstances related to each individual patient account.

Referring Physicians and Practice
Groups

Our relationships with
our referring physicians and referring practice groups are critical to our success. Our physicians seek to establish and maintain
long-term professional relationships with referring physicians in the communities where we practice. We believe that our community
presence, through our hospital coverage and FCMG, assists referring physicians with further enhancing their practices by providing
well-coordinated and highly responsive care to their patients who require our musculoskeletal services, diagnostic services and
rehabilitative care.

Government Regulation

The healthcare industry
is governed by a framework of federal and state laws, rules and regulations that are extensive and complex and for which, in many
cases, the industry has the benefit of only limited judicial and regulatory interpretation. If one of our physicians or physician
practices is found to have violated these laws, rules or regulations, our business, financial condition and results of operations
could be materially adversely affected. Moreover, the Affordable Care Act signed into law in March 2010 contains numerous provisions
that are reshaping the United States healthcare delivery system, and healthcare reform continues to attract significant legislative
interest, regulatory activity, new approaches, legal challenges and public attention that create uncertainty and the potential
for additional changes. Healthcare reform implementation, additional legislation or regulations, and other changes in government
policy or regulation may affect our reimbursement, restrict our existing operations, limit the expansion of our business or impose
additional compliance requirements and costs, any of which could have a material adverse effect on our business, financial condition,
results of operations, cash flows and the trading price of our common stock.

Fraud and Abuse Provisions

Existing federal laws
governing Medicare, TRICARE and other federal healthcare programs (the “FHC Programs”), as well as similar state laws,
impose a variety of fraud and abuse prohibitions on healthcare companies like us. These laws are interpreted broadly and enforced
aggressively by multiple government agencies, including the Office of Inspector General of the Department of Health and Human Services,
the Department of Justice (the “DOJ”) and various state authorities.

The fraud and abuse
laws include extensive federal and state regulations applicable to our financial relationships with hospitals, referring physicians
and other healthcare entities. In particular, the federal anti-kickback statute prohibits the offer, payment, solicitation or receipt
of any remuneration in return for either referring Medicare, TRICARE or other FHC Program business, or purchasing, leasing, ordering
or arranging for or recommending any service or item for which payment may be made by an FHC Program. In addition, federal physician
self-referral legislation, commonly known as the “Stark Law,” prohibits a physician from ordering certain designated
health services reimbursable by Medicare from an entity with which the physician has a prohibited financial relationship. These
laws are broadly worded and, in the case of the anti-kickback statute, have been broadly interpreted by federal courts, and potentially
subject many healthcare business arrangements to government investigation and prosecution, which can be costly and time consuming.

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There are a variety
of other types of federal and state fraud and abuse laws, including laws authorizing the imposition of criminal, civil and administrative
penalties for filing false or fraudulent claims for reimbursement with government healthcare programs. These laws include the civil
False Claims Act (“FCA”), which prohibits the submitting of or causing to be submitted false claims to the federal
government or federal government programs, including Medicare, the TRICARE program for military dependents and retirees, and the
Federal Employees Health Benefits Program. The FCA also applies to the improper retention of known overpayments and includes “whistleblower”
provisions that permit private citizens to sue a claimant on behalf of the government and thereby share in the amounts recovered
under the law and to receive additional remedies.

In addition, federal
and state agencies that administer healthcare programs have at their disposal statutes, commonly known as “civil money penalty
laws,” that authorize substantial administrative fines and exclusion from government programs in cases where an individual
or company that filed a false claim, or caused a false claim to be filed, knew or should have known that the claim was false or
fraudulent. As under the FCA, it often is not necessary for the agency to show that the claimant had actual knowledge that the
claim was false or fraudulent in order to impose these penalties.

If we were excluded
from any government-sponsored healthcare programs, not only would we be prohibited from submitting claims for reimbursement under
such programs, but we also would be unable to contract with other healthcare providers, such as hospitals, to provide services
to them. It could also adversely affect our ability to contract with, or to obtain payment from, non-governmental payors.

Government Reimbursement Requirements

In order to participate
in the Medicare program, we must comply with stringent and often complex enrollment and reimbursement requirements. These programs
generally provide for reimbursement on a fee-schedule basis rather than on a charge-related basis, we generally cannot increase
our revenue by increasing the amount we charge for our services. To the extent our costs increase, we may not be able to recover
our increased costs from these programs, and cost containment measures and market changes in non-governmental insurance plans have
generally restricted our ability to recover, or shift to non-governmental payors, these increased costs. In attempts to limit federal
and state spending, there have been, and we expect that there will continue to be, a number of proposals to limit or reduce Medicare
reimbursement for various services. Our business may be significantly and adversely affected by any such changes in reimbursement
policies and other legislative initiatives aimed at reducing healthcare costs associated with Medicare, TRICARE and other government
healthcare programs.

Our business also could
be adversely affected by reductions in or limitations of reimbursement amounts or rates under these government programs, reductions
in funding of these programs or elimination of coverage for certain individuals or treatments under these programs.

Antitrust

The healthcare industry
is subject to close antitrust scrutiny. In recent years, the Federal Trade Commission (the “FTC”), the Department of
Justice (“DOJ”) and state Attorney General have increasingly taken steps to review and, in some cases, taken enforcement
action against business conduct and acquisitions in the healthcare industry. Violations of antitrust laws may be punishable by
substantial penalties, including significant monetary fines, civil penalties, criminal sanctions, consent decrees and injunctions
prohibiting certain activities or requiring divestiture or discontinuance of business operations. Any of these penalties could
have a material adverse effect on our business, financial condition and results of operations. We consider the antitrust laws in
connection with the acquisition of physician practices and the operation of our business, and we believe our operations are in
compliance with applicable laws.

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HIPAA and Other Privacy Laws

Numerous federal and
state laws, rules and regulations govern the collection, dissemination, use and confidentiality of protected health information,
including the federal Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), and its implementing
regulations, violations of which are punishable by monetary fines, civil penalties and, in some cases, criminal sanctions. As part
of our medical record keeping, third-party billing, research and other services, we and our affiliated practices collect and maintain
protected health information on the patients that we serve.

HHS's Security Standards
require healthcare providers to implement administrative, physical and technical safeguards to protect the integrity, confidentiality
and availability of individually identifiable health information that is electronically received, maintained or transmitted (including
between us and our affiliated practices). We have implemented security policies, procedures and systems designed to facilitate
compliance with the HIPAA Security Standards.

In February 2009, Congress
enacted the Health Information Technology for Economic and Clinical Health Act (“HITECH”) as part of the American Recovery
and Reinvestment Act (“ARRA”). Among other changes to the law governing protected health information, HITECH strengthens
and expands HIPAA, increases penalties for violations, gives patients new rights to restrict uses and disclosures of their health
information, and imposes a number of privacy and security requirements directly on our “Business Associates,” which
are third-parties that perform functions or services for us or on our behalf.

In addition to the
federal HIPAA and HITECH requirements, numerous other state and certain other federal laws protect the confidentiality of patient
information, including state medical privacy laws, state social security number protection laws, human subjects research laws and
federal and state consumer protection laws. In some cases, state laws are more stringent than HIPAA and therefore, are not preempted
by HIPAA.

Environmental Regulations

Our healthcare operations
generate medical waste that must be disposed of in compliance with federal, state and local environmental laws, rules and regulations.
Our office-based operations are subject to compliance with various other environmental laws, rules and regulations. Such compliance
does not, and we anticipate that such compliance will not, materially affect our capital expenditures, financial position or results
of operations.

Compliance Program

We maintain a compliance
program that reflects our commitment to complying with all laws, rules and regulations applicable to our business and that meets
our ethical obligations in conducting our business (the “Compliance Program”). We believe our Compliance Program provides
a solid framework to meet this commitment and our obligations as a provider of health care services, including:

•

a Compliance Committee consisting of our senior executives;

•

our Code of Ethics, which is applicable to our employees, officers and directors;

•

a disclosure program that includes a mechanism to enable individuals to disclose on a confidential
or anonymous basis to our Chief Executive Officer, or any person who is not in the disclosing individual's chain of command, issues
or questions believed by the individual to be a potential violation of criminal, civil, or administrative laws;

•

an organizational structure designed to integrate our compliance objectives into our corporate
offices and Medical Centers of Excellence; and

•

education, monitoring and corrective action programs, including a disclosure policy designed to
establish methods to promote the understanding of our Compliance Program and adherence to its requirements.

The foundation of our
Compliance Program is our Code of Ethics which is intended to be a comprehensive statement of the ethical and legal standards
governing the daily activities of our employees, affiliated professionals, independent contractors, officers and directors. All
our personnel are required to abide by, and are given thorough education regarding, our Code of Ethics. In addition, all
employees are expected to report incidents that they believe in good faith may be in violation of our Code of Ethics.

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Government Investigations

We expect that audits,
inquiries and investigations from government authorities, agencies, contractors and payors will occur in the ordinary course of
business. Such audits, inquiries and investigations and their ultimate resolutions, individually or in the aggregate, could have
a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our
common stock. To the best of our knowledge, as of this time, our health care business is not the subject of any pending audit,
inquiry or investigation by any governmental authority.

Legal Proceedings

From time to time,
we may become involved in lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is
subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our
business. Our contracts with hospitals generally requires us to indemnify them and their affiliates for losses resulting from the
negligence of our physicians.

Although we currently
maintain liability insurance coverage intended to cover professional liability and certain other claims, we cannot assure that
our insurance coverage will be adequate to cover liabilities arising out of claims asserted against us in the future where the
outcomes of such claims are unfavorable to us. Liabilities in excess of our insurance coverage, including coverage for professional
liability and certain other claims, could have a material adverse effect on our business, financial condition and results of operations.

On or about July 25,
2104, MedTRX Health Care Solutions, LLC and MedTRX Collection Services, LLC (“MedTRX”) filed a demand for arbitration
with the American Arbitration Association (“AAA”) against FCID Medical, Inc. and First Choice Medical Group of Brevard,
LLC (collectively, “First Choice”). MedTRX claims that First Choice breached an exclusive five year billing and
collection agreement dated as of December 9, 2011 (“Billing Agreement”) by engaging another billing service on or about
June 1, 2014. MedTRX also claims that First Choice failed to pay for services that MedTRX had performed prior to June 1,
2014 leaving a balance due of $93,280.84. MedTRX claims total damages of “not less than $3 million. On or
about September 15, 2014, First Choice served its Answering Statement and Counterclaims (“Answering Statement”).
In the Answering Statement, First Choice denies all liability to MedTRX due to MedTRX’s numerous material breaches of
the Billing Agreement and asserted two counterclaims for fraudulent inducement and negligence against MedTRX. First
Choice seeks damages of not less than $2 Million against MedTRX.

However, no assurance can be given that any amounts ultimately due by the Company will not have a material impact on the Company's
financial condition. Colin Halpern, a former member of our Board of Directors, is the Managing Member of MedTRX Provider Network,
LLC, which is an affiliate of MedTRX.

Professional and General Liability
Coverage

We maintain professional
and general liability insurance policies with third-party insurers on a claims-made basis, subject to deductibles, self-insured
retention limits, policy aggregates, exclusions, and other restrictions, in accordance with standard industry practice. We believe
that our insurance coverage is appropriate based upon our claims experience and the nature and risks of our business. However,
we cannot assure that any pending or future claim will not be successful or if successful will not exceed the limits of available
insurance coverage.

Our Real Estate Business

FCID Holdings, Inc.

Our wholly-owned subsidiary,
FCID Holdings, Inc. (“FCID Holdings”) operates our Company’s real estate interests. Currently, FCID Holding has
one real estate holding, Marina Towers, a Class A 78,000 square foot, six-story building located on the Indian River in Melbourne,
Florida. The address is 709 South Harbor City Boulevard, Melbourne, Florida 32901. In addition to housing our corporate headquarters
and First Choice Medical Group, the building, which averages 95% annual occupancy, also leases commercial office space to tenants.
Our corporate headquarters currently utilizes approximately 5,609 square feet on the second floor of Marina Towers; and FCMG, including
its MRI center, currently occupies approximately 19,000 square feet on the first floor and ground floor.

Our corporate headquarters
is located on the shore of the Indian River at 709 S. Harbor City Boulevard, Suite 250, Melbourne, Florida 32901 in Marina Towers,
which is owned by Marina Towers, LLC, a subsidiary owned by FCID Holdings, Inc. and MTMC of Melbourne, Inc., both wholly owned
subsidiaries of the Company.

Employees

As of
December 31, 2014, FCHS and its subsidiaries, in aggregate, employed approximately 53 employees, which included 6 physicians
and 2 physician assistants.

Where You Can Find Additional Information

The Company is subject
to the reporting requirements under the Exchange Act. The Company files with, or furnishes to, the SEC quarterly reports on Form
10-Q, current reports on Form 8-K, and amendments to those reports and will furnish its proxy statement. These filings are available
free of charge on the Company's website, www.myfchs.com, shortly after they are filed with, or furnished to, the SEC. The SEC maintains
an Internet website, www.sec.gov, which contains reports and information statements and other information regarding issuers.

ITEM 1A. RISK FACTORS

The risk factors discussed
below could cause our actual results to differ materially from those expressed in any forward-looking statements. Although we have
attempted to list comprehensively these important factors, we caution you that other factors may in the future prove to be important
in affecting our results of operations. New factors emerge from time to time and it is not possible for us to predict all of these
factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in any forward-looking statement.

The risks described
below set forth what we believe to be the most material risks associated with the purchase of our common stock. Before you invest
in our common stock, you should carefully consider these risk factors, as well as the other information contained in this prospectus.

GENERAL RISKS REGARDING OUR HEALTHCARE SERVICES BUSINESS

We have a limited operating history that impedes our ability
to evaluate our potential future performance and strategy.

We have only owned
and operated our model Medical Center of Excellence, FCMG, since 2012 and have experienced net losses to date. Using FCMG as our
model “Medical Center of Excellence,” we plan to hire additional physicians to create state-of-the-art Medical Centers
of Excellence committed to delivering patient-centric care in select markets in the United States. Our limited operating history
makes it difficult for us to evaluate our future business prospects and make decisions based on estimates of our future performance.
To address these risks and uncertainties, we must do the following:

·

Successfully execute our business strategy to establish and extend the “First Choice Healthcare
Solutions” brand and reputation as a profitable, well-managed enterprise committed to delivering quality and cost-effective
health care primarily in parts of the southeastern and western United States and then pursue select other U.S. markets;

·

Respond to competitive developments;

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·

Effectively and efficiently integrate new Medical Centers
of Excellence; and

·

Attract, integrate, retain and motivate qualified personnel.

We cannot be certain
that our business strategy will be successful or that we will successfully address these risks. In the event that we do not successfully
address these risks, our business, prospects, financial condition and results of operations may be materially and adversely affected.

We are implementing a strategy to
grow our business by hiring additional physicians to create FCHS-branded Medical Centers of Excellence in select U.S. markets,
which requires significant additional capital and may not generate income.

We intend to grow
our business by hiring and managing additional physicians to create FCHS-branded Medical Centers of Excellence in select U.S.
markets. We estimate the investment to create each additional Medical Center of Excellence to be approximately $4-5
million. Although we are taking steps to raise funds through equity offerings to implement our growth strategy, these funds
may not be adequate to offset all of the expenses we incur in expanding our business. We will need to generate revenues to
offset expenses associated with our growth, and we may be unsuccessful in achieving sufficient revenues, despite our attempts
to grow our business. If our growth strategies do not result in sufficient revenues and income, we may have to abandon our
plans for further growth and/or cease operations, which could have a material and adverse effect on our business,
prospects and financial condition.

In order to pursue our business strategy,
we will need to raise additional capital. If we are unable to raise additional capital, our business may fail.

We will need to raise
additional capital to pursue our business plan, which includes hiring additional physicians in order to expand our business operations
and develop our FCHS brand of Medical Centers of Excellence. We believe that we have access to capital resources through possible
public or private equity offerings, debt financings, corporate collaborations or other means. If the economic climate in the United
States does not improve or further deteriorates, our ability to raise additional capital could be negatively impacted. If we are
unable to secure additional capital, we may be required to curtail our initiatives and take additional measures to reduce costs
in order to conserve our cash in amounts sufficient to sustain operations and meet our obligations.

We may not be able to achieve the
expected benefits from opening new Medical Centers of Excellence, which would adversely affect our financial condition and results.

We plan to rely on
hiring additional physicians to create FCHS-branded Medical Center of Excellence as a method of expanding our business. If we do
not successfully integrate such new Medical Centers of Excellence, we may not realize anticipated operating advantages and cost
savings. The integration of these new Medical Centers of Excellence into our business operations involves a number of risks, including:

·

Demands on management related to the increase in our Company’s size with the establishment
of each new Medical Center of Excellence, which is crucial to our business plan;

·

The diversion of management’s attention from the management of daily operations to the integration
of operations of the new Medical Centers of Excellence;

·

Difficulties in the assimilation and retention of employees;

·

Potential adverse effects on operating results; and

·

Challenges in retaining patients from the new physicians.

Further, the successful
integration of the new physicians will depend upon our ability to manage the new physicians and to eliminate redundant and excess
costs. Difficulties in integrating new physicians may not be able to achieve the cost savings and other size-related benefits that
we hoped to achieve, which would harm our financial condition and operating results.

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If we are unable to attract and retain
qualified medical professionals, our ability to maintain operations at our existing Medical Center of Excellence, attract patients
or open new multi-specialty Medical Centers of Excellence could be negatively affected.

We generate
our revenues through physicians and medical professionals who work for us or we manage, to perform medical services and
procedures. The retention of those physicians and medical professionals is a critical factor in the success of our medical
multi-specialty Centers, and the hiring of qualified physicians and medical professionals is a critical factor in our ability
to launch new multi-specialty Medical Centers of Excellence successfully. However, at times it may be difficult for us to
retain or hire qualified physicians and medical professionals. If we are unable consistently to hire and retain qualified
physicians and medical professionals, our ability to open new Centers, maintain operations at existing medical
multi-specialty Centers, and attract patients could be materially and adversely affected.

We may have difficulties managing our Company’s
growth, which could lead to higher operating losses, or we may not grow at all.

Rapid growth could
strain our human and capital resources, potentially leading to higher operating losses. Our ability to manage operations and control
growth will be dependent upon our ability to raise and spend capital to successfully attract, train, motivate, retain and manage
new employees and continue to update and improve our management and operational systems, infrastructure and other resources, financial
and management controls, and reporting systems and procedures. Should we be unsuccessful in accomplishing any of these essential
aspects of our growth in an efficient and timely manner, then management may receive inadequate information necessary to manage
our operations, possibly causing additional expenditures and inefficient use of existing human and capital resources or we otherwise
may be forced to grow at a slower pace that could slow or eliminate our ability to achieve and sustain profitability. Such slower
than expected growth may require us to restrict or cease our operations and go out of business.

Since a significant percentage of
our operating expenses are fixed, a relatively small decrease in revenues could have a significant negative impact on our financial
results.

A significant percentage
of our expenses are currently fixed, meaning they do not vary significantly with our increase or decrease in revenues. Such expenses
include, but will not be limited to, debt service and capital lease payments, rent and operating lease payments, salaries, maintenance
and insurance. As a result, a small reduction in the prices we charge for our services or procedure volume could have a disproportionately
negative effect on our financial results.

Loss of key executives, limited experience
in operating a public company and failure to attract qualified managers and sales persons could limit our growth and negatively
impact our operations.

We depend upon our
management team to a substantial extent. In particular, we depend upon Christian C. Romandetti, our President and Chief Executive
Officer, for his skills, experience and knowledge of our Company and industry contacts. The loss of Mr. Romandetti or other members
of our management team could have a material adverse effect on our business, results of operations or financial condition.

Our limited experience
in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage to us in that
it is likely that an increasing amount of management’s time will be devoted to these activities which will result in less
time being devoted to the management and growth of our Company. It is possible that we will be required to expand our employee
base and hire additional employees to support our operations as a public company which will increase our operating costs in future
periods.

We require medical
clinic managers, medical professionals and marketing persons with experience in our industry to operate and market our medical
clinic services. It is impossible to predict the availability of qualified persons or the compensation levels that will be required
to hire them. The loss of the services of any member of our senior management or our inability to hire qualified persons at economically
reasonable compensation levels could adversely affect our ability to operate and grow our business.

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We may be subject to medical professional
liability risks, which could be costly and could negatively impact our business and financial results.

We may be subject to
professional liability claims. Although there currently are no known hazards associated with any of our procedures or technologies
when performed or used properly, hazards may be discovered in the future. For example, there is a risk of harm to a patient during
an MRI if the patient has certain types of metal implants or cardiac pacemakers within his or her body. Although patients are screened
to safeguard against this risk, screening may nevertheless fail to identify the hazard. There also is potential risk to patients
treated with therapy equipment secondary to inadvertent or excessive over- or under- exposure to radiation. We maintain professional
liability insurance with coverage that we believe is consistent with industry practice and appropriate in light of the risks attendant
to our business. However, any claim made against us could be costly to defend against, resulting in a substantial damage award
against us and divert the attention of our management team from our operations, which could have an adverse effect on our financial
performance.

The healthcare regulatory and political framework is uncertain
and evolving.

Healthcare laws and
regulations may change significantly in the future which could adversely affect our financial condition and results of operations.
We continuously monitor these developments and modify our operations from time to time as the legislative and regulatory environment
changes.

In March 2010, President
Barack Obama signed a health care reform measure, which provides healthcare insurance for approximately 30 million more Americans.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively,
the “PPACA”), which includes a variety of healthcare reform provisions and requirements that will become effective
at varying times through 2018, substantially changes the way health care is financed by both governmental and private insurers,
including several payment reforms that establish payments to hospitals and physicians based in part on quality measures, and may
significantly impact our industry. The PPACA requires, among other things, payment rates for services using imaging equipment that
costs over $1 million to be calculated using revised equipment usage assumptions and reduced payment rates for imaging services
paid under the Medicare Part B fee schedule. Many of the provisions of the PPACA will phase in over the course of the next several
years, and we are unable to predict what effect the PPACA or other healthcare reform measures that may be adopted in the future
will have on our business.

The healthcare industry is highly
regulated, and government authorities may determine that we have failed to comply with applicable laws or regulations.

The healthcare industry
and physicians’ medical practices, including the healthcare and other services that we and our affiliated physicians provide,
are subject to extensive and complex federal, state and local laws and regulations, compliance with which imposes substantial costs
on us. Of particular importance are the provisions summarized as follows:

·

federal laws (including the federal False Claims Act) that prohibit entities and individuals from
knowingly or recklessly making claims to Medicare and other government programs that contain false or fraudulent information or
from improperly retaining known overpayments;

·

a provision of the Social Security Act, commonly referred to as the “anti-kickback”
law, that prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration,
in cash or in kind, in return for the referral or recommendation of patients for items and services covered, in whole or in part,
by federal healthcare programs, such as Medicare;

·

a provision of the Social Security Act, commonly referred to as the Stark Law, that, subject to
limited exceptions, prohibits physicians from referring Medicare patients to an entity for the provision of certain “designated
health services” if the physician or a member of such physician’s immediate family has a direct or indirect financial
relationship (including a compensation arrangement) with the entity;

·

similar state law provisions pertaining to anti-kickback, fee splitting, self-referral and false
claims issues, which typically are not limited to relationships involving federal payors;

·

provisions of HIPAA that prohibit knowingly and willfully executing a scheme or artifice to defraud
a healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious
or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services;

·

state laws that prohibit general business corporations from practicing medicine, controlling physicians’
medical decisions or engaging in certain practices, such as splitting fees with physicians;

17

·

federal and state laws that prohibit providers from billing and receiving payment from Medicare
and TRICARE for services unless the services are medically necessary, adequately and accurately documented and billed using codes
that accurately reflect the type and level of services rendered;

·

federal and state laws pertaining to the provision of services by non-physician practitioners,
such as advanced nurse practitioners, physician assistants and other clinical professionals, physician supervision of such services
and reimbursement requirements that may be dependent on the manner in which the services are provided and documented; and

·

federal laws that impose civil administrative sanctions for, among other violations, inappropriate
billing of services to federally funded healthcare programs, inappropriately reducing hospital care lengths of stay for such patients,
or employing individuals who are excluded from participation in federally funded healthcare programs.

In addition, we believe that our business
will continue to be subject to increasing regulation, the scope and effect of which we cannot predict.

We may in the future become the subject
of regulatory or other investigations or proceedings, and our interpretations of applicable laws, rules and regulations may be
challenged.

Regulatory authorities
or other parties may assert that our arrangements with our affiliated professional contractors constitute fee splitting or the
corporate practice of medicine and seek to invalidate these arrangements. Such parties also could assert that our relationships,
including fee arrangements, among our affiliated professional contractors, hospital clients or referring physicians violate the
anti-kickback, fee splitting or self-referral laws and regulations or that we have submitted false claims or otherwise failed to
comply with government program reimbursement requirements.

Such investigations,
proceedings and challenges could result in substantial defense costs to us and a diversion of management’s time and attention.
In addition, violations of these laws are punishable by monetary fines, civil and criminal penalties, exclusion from participation
in government-sponsored healthcare programs, and forfeiture of amounts collected in violation of such laws and regulations, any
of which could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading
price of our common stock.

Federal and state laws that protect
the privacy and security of protected health information may increase our costs and limit our ability to collect and use that information
and subject us to penalties if we are unable to fully comply with such laws.

Numerous federal and
state laws and regulations govern the collection, dissemination, use, security and confidentiality of individually identifiable
health information. These laws include:

·

Provisions of HIPAA that limit how healthcare providers may use and disclose individually identifiable
health information, provide certain rights to individuals with respect to that information and impose certain security requirements;

·

HITECH, which strengthens and expands the HIPAA Privacy Standards and Security Standards;

·

Other federal and state laws restricting the use and protecting the privacy and security of protected
information, many of which are not preempted by HIPAA;

·

Federal and state consumer protection laws; and

·

Federal and state laws regulating the conduct of research with human subjects.

As part of our medical
record keeping, third-party billing, research and other services, we collect and maintain protected health information in electronic format. New protected health information standards, whether implemented pursuant to HIPAA, HITECH, congressional
action or otherwise, could have a significant effect on the manner in which we handle healthcare-related data and communicate with
payors, and compliance with these standards could impose significant costs on us or limit our ability to offer services, thereby
negatively impacting the business opportunities available to us.

18

If we do not comply
with existing or new laws and regulations related to protected health information we could be subject to remedies that include
monetary fines, civil or administrative penalties or criminal sanctions.

Changes in the rates or methods of
third-party reimbursements for medical services could result in reduced demand for our services or create downward pricing pressure,
which would result in a decline in our revenues and harm to our financial position.

Third-party payors
such as Medicare, TRICARE and commercial health insurance companies, may change the rates or methods of reimbursement for the services
we currently provide or plan to provide and such changes could have a significant negative impact on those revenues. At this time,
we cannot predict the impact that rate reductions will have on our future revenues or business. Moreover, patients on whom we currently
depend, and expect to continue to depend on, for the majority of our medical clinic revenues generally rely on reimbursement from
third-party payors for the payment of medical services. If our patients begin to receive decreased reimbursement from third-party
payors for their medical services and as such are forced to pay for the remainder of their medical services out of pocket, then
a reduced demand for our services or downward pricing pressures could result, which could have a material impact on our financial
position.

Future requirements
limiting access to or payment for medical services may negatively impact our future revenues or business. If legislation substantially
changes the way healthcare is reimbursed by both governmental and commercial insurance carriers, it may negatively impact payment
rates for certain medical services. We cannot predict at this time whether or the extent to which other proposed changes will be
adopted, if any, or how these or future changes will affect the demand for our services.

Managed care organizations may prevent
their members from using our services which would cause us to lose current and prospective patients.

Healthcare providers
participating as providers under managed care plans may be required to refer medical services to specific medical clinics depending
on the plan in which each covered patient is enrolled. These requirements may inhibit their members from using our medical services
in some cases. The proliferation of managed care may prevent an increasing number of their members from using our services in the
future which would cause our revenues to decline.

We may need to restructure our services and practices
if our methods are determined not to comply with the Stark Law.

The Ethics in Patient
Referral Act of 1989, as amended (the “Stark Law”), is a civil statute that generally (i) prohibits physicians from
making referrals for designated health services to entities in which the physicians have a direct or indirect financial relationship
and (ii) prohibits entities from presenting or causing to be presented claims or bills to any individual, third-party payor, or
other entity for designated health services furnished pursuant to a prohibited referral. Under the Stark Law, a physician may not
refer patients for certain designated health services to entities with which the physician has a direct or indirect financial relationship,
unless allowed under an enumerated exception. Under the Stark Law, there are numerous statutory and regulatory exceptions for certain
otherwise prohibited financial relationships. A transaction must fall entirely within an exception to be lawful under the Stark
Law.

We believe that any
referrals between or among our Company, the physicians providing services and the facilities where procedures are performed will
be for services compliant under the Stark Law. If these arrangements are found to violate the Stark Law, we may be required to
restructure such services or be subject to civil or criminal fines and penalties, including the exclusion of our Company, the physicians,
and the facilities from the Medicare programs, any of which events could have a material adverse effect on our business, financial
condition and results of operations.

Some states have enacted
statutes, similar to the federal Anti-Kickback Statute and Stark Law, applicable to our operations because they cover all referrals
of patients regardless of the payer or type of healthcare service provided. These state laws vary significantly in their scope
and penalties for violations. Although we have endeavored to structure our business operations to be in material compliance with
such state laws, authorities in those states could determine that our business practices are in violation of their laws, which
would have a material adverse effect on our business, financial condition and results of operations.

We are subject to federal and state restrictions on advertising
that may adversely affect our ability to advertise our Centers and services.

The growth of our healthcare
business is dependent on advertising, which is subject to regulation by the Federal Trade Commission (“FTC”). We believe
that we have structured our advertising practices to be in material compliance with FTC regulations and guidance. However, we cannot
be certain that the FTC will not determine that our advertising practices are in violation of such laws and guidance.

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In addition, the laws
of many states restrict certain advertising practices by and on behalf of physicians. Many states do not offer clear guidance on
the bounds of acceptable advertising practices or on the limits of advertising provided by management companies on behalf of physicians.
Although we have endeavored to structure our advertising practices to be in material compliance with such state laws, authorities
in those states could determine that our advertising practices are in violation of those laws.

Fee-splitting prohibitions in some states may limit our
financial prospects.

Many states prohibit
medical professionals from paying a portion of a professional fee to another individual unless that individual is an employee or
partner in the same professional practice. If we violate a state’s fee-splitting prohibition, we may be subject to civil
or criminal fines, and the physician participating in such arrangements may lose his or her licensing privileges. Many states do
not offer clear guidance on what relationships constitute fee-splitting, particularly in the context of providing management services
for doctors. We have endeavored to structure our business operations in material compliance with these laws. However, state authorities
could find that fee-splitting prohibitions apply to our business practices in their states. If any aspect of our operations were
found to violate fee-splitting laws or regulations, this could have a material adverse effect on our business, financial condition,
results of operations and cash flows.

Facility licensure requirements in some states may be
costly and time-consuming, thereby limiting or delaying our operations.

State Departments of
Health may require us to obtain licenses in the various states in which we will establish our future multi-specialty Medical Centers
of Excellence or other business operations. We intend to obtain the necessary material licensure in states where required. However,
not all of the regulations governing the need for licensure are clear and there is limited guidance available regarding certain
interpretative issues. Therefore, it is possible that a state regulatory authority could determine that we are improperly conducting
business operations without a license in that state. This could subject us to significant fines or penalties, result in our being
required to cease operations in that state or otherwise have a material adverse effect on our business, financial condition and
results of operations. Although we currently have no reason to believe that we will be unable to obtain the necessary licenses
without unreasonable expense or delay, there can be no assurance that we will be able to obtain any required licensure.

Our Company and our
physicians are covered entities under HIPAA if we or our physicians provide services that are reimbursable under Medicare or other
third-party payors (e.g., orthopedic services). Although the covered health care providers themselves are primarily liable for
HIPAA compliance, as a “business associate” to these covered entities we are bound indirectly to comply with the HIPAA
privacy regulations, and we are directly bound to comply with certain of the HIPAA security regulations. Although we cannot predict
the total financial or other impact of these privacy and security regulations on our business, compliance with these regulations
could require us to incur substantial expenses, which could have a material adverse effect on our business, financial condition
and results of operations. In addition, we will continue to remain subject to any state laws that are more restrictive than the
privacy regulations issued under the Administrative Simplification Provisions.

Our medical business may be reliant upon direct-to-patient
marketing.

The effectiveness of
our marketing programs and messages to patients can have a significant impact on our financial performance. The effectiveness of
marketing may fluctuate, resulting in changes in the cost of marketing per procedure, and variations in our margins. Less effective
marketing programs could materially and adversely affect our business, financial condition and results of operations.

If technological changes occur rendering
our equipment or services obsolete, or increase our cost structure, we may need to make significant capital expenditures or modify
our business model, which could cause our revenues or results of operations to decline.

Industry competitive
or clinical factors, among others, may require us to introduce alternate medical technology for the services and procedures we
offer than those that may currently be in use in our medical multi-specialty Centers. Introducing such technology could require
significant capital investment or force us to modify our business model in such a way as to make our revenues or results of operations
decline. An increase in costs could reduce our ability to maintain our margins. An increase in prices could adversely affect our
ability to attract new patients. If we are unable to obtain or maintain state of the art equipment that is essential to the professional
medical services provided by our clinics, our business, prospects, results of operations and financial condition could be materially
and adversely affected.

20

We rely significantly on information
technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents,
could harm our ability to operate our business effectively.

Our internal computer
systems and those of third parties with which we contract may be vulnerable to damage from cyber-attacks, computer viruses, unauthorized
access, natural disasters, terrorism, war and telecommunication and electrical failures despite the implementation of security
measures. System failures, accidents or security breaches could cause interruptions in our operations, and could result in a material
disruption of our business operations, in addition to possibly requiring substantial expenditures of resources to remedy. To the
extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate
disclosure of confidential or proprietary information, we could incur liability and our collections from third-party payors could
be delayed.

If we are forced to lower our procedure
prices in order to compete with a better-financed or lower-cost provider of medical healthcare services, our medical revenues and
results of operations could decline.

FCMG and our future
multi-specialty Medical Centers of Excellence will compete with medical clinics and other technologies currently under development.
Competition comes from other clinics and from hospitals, hospital-affiliated group entities and physician group practices.

Some of our current
competitors, or other companies which may choose to enter the industry in the future, may have substantially greater financial,
technical, managerial, marketing or other resources and experience than we do and may be able to compete more effectively. Similarly,
competition could increase if the market for healthcare services does not experience growth, and existing providers compete for
market share. Additional competition may develop, particularly if the price for services or reimbursement decreases. Our management,
operations, strategy and marketing plans may not be successful in meeting this competition.

If more competitors
begin to offer healthcare services in our geographic markets, we might find it necessary to reduce the prices we charge, particularly
if competitors offer the services at lower prices than we do. If that were to happen or we were not successful in cost effectively
acquiring patients for our procedures, we may not be able to make up for the reduced gross profit margin by increasing the number
of procedures that we perform, and our business, financial condition and results from operations could be adversely affected.

A decline in consumer disposable
income could adversely affect the number of procedures performed which could have a negative impact on our financial results.

After payments by commercial
healthcare insurance companies or government programs, including Medicare and TRICARE, the remaining portion of the cost of medical
care is paid by the patient. Some of our patients may not have the financial resources to pay for the services they receive at
FCMG, or services they may receive at our future Medical Centers of Excellence, which are ultimately not reimbursed by their healthcare
provider. Accordingly, our operating results may vary based upon the impact of changes in the disposable income of patients using
our services, among other economic factors. A significant decrease in consumer disposable income in a weak economy may result in
a decrease in the number of elective medical procedures performed by FCMG or our future Centers, and a related decline in our revenues
and profitability. In addition, weak economic conditions may cause some of our patients to experience financial distress or declare
bankruptcy, which may negatively impact our accounts receivable collection experience.

Adverse changes in general domestic
and worldwide economic conditions and instability and disruption of credit markets could adversely affect our operating results,
financial condition, or liquidity.

We are subject to risks
arising from adverse changes in general domestic and global economic conditions, including recession or economic slowdown and disruption
of credit markets. We continue to see domestic and global weakness due to economic uncertainties and volatility in financial markets.
We believe our healthcare clinics may be impacted by unemployment rates, the number of under-insured or uninsured patients and
other conditions arising from the global economic conditions described above. At this time, it is unclear what impact this might
have on our future revenues or business.

21

The cost and availability
of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. Concern about
the stability of the markets generally and the strength of counterparties specifically has led many lenders and institutional investors
to reduce, and in some cases, cease to provide funding to borrowers.

Turbulence in the United
States and international markets and economies may adversely affect our liquidity and financial condition, and the liquidity and
financial condition of our patients. Deterioration in market conditions could limit our ability, and the ability of our patients,
to timely pay expenses, and access the capital markets to meet liquidity needs, resulting in material and adverse effects on our
business, prospects, financial condition and results of operations.

We are currently involved in an arbitration
proceeding, which could be time consuming and costly to defend, and could also have a negative outcome for our business.

On or about July 25,
2014, MedTRX Health Care Solutions, LLC and MedTRX Collection Services, LLC (“MedTRX”) filed a demand for arbitration
with the American Arbitration Association (“AAA”) against FCID Medical, Inc. and First Choice Medical Group of Brevard,
LLC (collectively, “First Choice”). MedTRX claims that First Choice breached an exclusive five year billing and
collection agreement dated as of December 9, 2011 (“Billing Agreement”) by engaging another billing service on or about
June 1, 2014. MedTRX also claims that First Choice failed to pay for services that MedTRX had performed prior to June 1,
2014 leaving a balance due of $93,280.84. MedTRX claims total damages of “not less than $3 million. On or
about September 15, 2014, First Choice served its Answering Statement and Counterclaims (“Answering Statement”).
In the Answering Statement, First Choice denies all liability to MedTRX due to MedTRX’s numerous material breaches of
the Billing Agreement and asserted two counterclaims for fraudulent inducement and negligence against MedTRX. First
Choice seeks damages of not less than $2 Million against MedTRX.

However, no assurance can be given that any amounts ultimately due by the Company will
not have a material impact on the Company's financial condition. Colin Halpern, a former member of our Board of Directors, is the
Managing Member of MedTRX Provider Network, LLC, which is an affiliate of MedTRX.

RISKS RELATED TO OUR REAL ESTATE BUSINESS

Our performance and value are subject to risks associated
with our real estate asset and with the real estate industry.

We are subject to the
risk that if our property does not generate revenues sufficient to meet our operating expenses, including debt service and capital
expenditures, our ability to operate and grow could be materially and adversely affected. The following factors, among others,
may adversely affect the revenues generated by our property:

·

Competition from other office and commercial properties;

·

Local real estate market conditions, such as oversupply or reduction in demand for office or other
commercial space;

·

Costs to comply with new local, state and federal laws;

·

Changes in interest rates and availability of financing;

·

Vacancies, changes in market rental rates and the need to periodically repair, renovate and re-let
space;

Civil disturbances, hurricanes and other natural disasters, or terrorist acts or acts of war which
may result in uninsured or undermined losses; and

·

Declines in the financial condition of our tenants and our ability to collect rents from our tenants.

22

We may face risks associated with the use of debt, including
refinancing risk.

We are subject to the
risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments
of principal and interest. Our wholly owned subsidiary, Marina Towers, LLC, is a party to a loan agreement with Guggenheim Life
and Annuity Company in the principal aggregate amount of $7,550,000 that matures on September 16, 2016. We anticipate that
only a small portion of the principal of our debt will be repaid prior to maturity. Therefore, we are likely to need to refinance
at least a portion of our outstanding debt as it matures. There is a risk that we may not be able to refinance existing debt or
that the terms of any refinancing will not be as favorable as the terms of our existing debt. If principal payments due at maturity
cannot be refinanced, extended or repaid with proceeds from other sources, such as new equity capital, our cash flow may not be
sufficient to repay all maturing debt when a significant “balloon” payment come due. There is a risk that we may be
unable to refinance on favorable terms or at all. This risk is currently heightened because of tightened underwriting standards
and increased credit risk premiums. These conditions, which may increase the cost and reduce the availability of debt, may continue
or worsen in the future.

The risks associated with the physical effects of weather
could have a material adverse effect on our property.

The physical effects
of weather could have a material adverse effect on our property, operations and business. For example, our property is located
on the riverfront in Brevard County, Florida. To the extent weather patterns change, our market could experience increases in storm
intensity or rising sea-levels that would make the property less desirable to tenants. Over time, these conditions could result
in declining demand for office space in our building or the inability of us to operate the building at all. These conditions may
also have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find
acceptable, increasing the cost of energy and increasing the cost of snow removal at our properties. There can be no assurance
that weather will not have a material adverse effect on our properties, operations or business.

RISKS RELATED TO OUR COMMON STOCK.

There has been a limited trading market for our common
stock to date.

While our common stock
is currently quoted on OTC Markets, Inc., the trading volume is limited. We are quoted on the OTCQB under the trading symbol “FCHS.”
It is anticipated that there will continue to be a limited trading market for our common stock on the OTCQB. A lack of an active
market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable.
The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our ability
to raise capital by selling shares of capital stock and may impair our ability to acquire other companies or technologies by using
common stock as consideration.

You may have difficulty trading and obtaining quotations
for our common stock.

Our common stock may
not be actively traded, and the bid and asked prices for our common stock on the OTCQB as our common stock is currently quoted,
may fluctuate widely. As a result, investors may find it difficult to dispose of, or to obtain accurate quotations of the price
of, our securities. This severely limits the liquidity of the common stock, and would likely reduce the market price of our common
stock and hamper our ability to raise additional capital.

The market price for our common stock may be volatile,
and your investment in our common stock could decline in value.

The stock market in
general has experienced extreme price and volume fluctuations. The market prices of the securities of healthcare services companies
have been highly historically volatile and may be highly volatile in the future. This volatility has often been unrelated to the
operating performance of particular companies. The following factors, in addition to other risk factors described in this section,
may have a significant impact on the market price of our common stock:

·

changes in government regulation of the medical industry;

·

changes in reimbursement policies of third-party insurance companies, self-insured companies or
government agencies;

·

actual or anticipated fluctuations in our operating results;

23

·

changes in financial estimates or recommendations by securities analysts;

·

developments involving corporate collaborators, if any;

·

changes in accounting principles; and

·

the loss of any of our key physicians or management personnel.

In the past, securities
class action litigation has often been brought against companies that experience volatility in the market price of their securities.
Whether or not meritorious, litigation brought against us could result in substantial costs and a diversion of management’s
attention and resources, which could adversely affect our business, operating results and financial condition.

We have not paid dividends in the past and have no immediate
plans to pay dividends.

We plan to reinvest
all of our earnings, to the extent we have earnings, in order to market our services and to cover operating costs and to otherwise
become and remain competitive. We do not plan to pay any cash dividends with respect to our securities in the foreseeable future.
We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the
holders of our common stock as a dividend. Therefore, you should not expect to receive cash dividends on the common stock we are
offering.

We expect that our quarterly results of operations will
fluctuate, and this fluctuation could cause our stock price to decline.

Our quarterly operating
results are likely to fluctuate in the future. These fluctuations could cause our stock price to decline. The nature of our business
involves variable factors, such as the timing of the research, development and regulatory pathways of our product candidates, which
could cause our operating results to fluctuate. Due to the possibility of fluctuations in our revenues and expenses, we believe
that quarter-to-quarter comparisons of our operating results are not a good indication of our future performance.

“Penny stock” rules may
make buying or selling our securities difficult which may make our stock less liquid and make it harder for investors to buy and
sell our securities.

Trading in our securities
is subject to the SEC’s “penny stock” rules and it is anticipated that trading in our securities will continue
to be subject to the penny stock rules for the foreseeable future. The SEC has adopted regulations that generally define a penny
stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules
require that any broker-dealer who recommends our securities to persons other than prior customers and accredited investors must,
prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written
agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction
involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the
penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by these
requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity
of our securities and consequently adversely affect the market price for our securities.

Our current directors and officers hold significant control
over our common stock and they may be able to control our Company indefinitely.

Our current directors
and officers currently have beneficial ownership of approximately 37.90% of our outstanding common stock. These significant
stockholders therefore have considerable influence over the outcome of all matters submitted to our stockholders for approval,
including the election of directors, the approval of significant corporate transactions.

Our charter documents and Delaware law may inhibit a takeover
that stockholders consider favorable.

Provisions of our Certificate
of Incorporation (“Certificate”) and bylaws and applicable provisions of Delaware law may delay or discourage transactions
involving an actual or potential change in control or change in our management, including transactions in which stockholders might
otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests.
The provisions in our Certificate and bylaws:

24

·

limit who may call stockholder meetings;

·

do not provide for cumulative voting rights; and

·

provide that all vacancies may be filled by the affirmative vote of a majority of directors then
in office, even if less than a quorum.

In addition, Section
203 of the Delaware General Corporation Law may limit our ability to engage in any business combination with a person who beneficially
owns 15% or more of our outstanding voting stock unless certain conditions are satisfied. The restriction lasts for a period of
three years following the share acquisition. These provisions may have the effect of entrenching our management team and may deprive
you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. The potential inability
to obtain a control premium could reduce the price of our common stock.

The exercise of existing warrants and conversion of existing
convertible debt may have a dilutive impact on our existing stockholders.

In financing
our operations, we have issued convertible debt and warrants. Warrants to purchase up to 1,875,000 shares of our common stock
at an exercise price of $3.60 were issued to MedTRX. Also, warrants were issued to Hillair Capital Investments
LP (“Hillair”), as the holder of a $2,320,000 8% convertible debenture (“Debenture”), to purchase up
to 2,320,000 shares of our Common Stock at an exercise price of $1.35 per share. Further, Hillair may convert the Debenture
at $1.00 per share. Additionally, CT Capital, Ltd may convert the accounts receivable line of credit to our common
stock at a conversion price of $0.75 per share. If these warrants were exercised and convertible debt converted into our
Common Stock, it could reduce the percentage ownership of our existing stockholders.

Failure to achieve and maintain internal controls in accordance
with Sections 302 and 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price.

If we fail to maintain
adequate internal controls or fail to implement required new or improved controls, as we grow or as such control standards are
modified, supplemented or amended from time to time; we may not be able to assert that we can conclude on an ongoing basis that
we have effective internal controls over financial reporting. Effective internal controls are necessary for us to produce reliable
financial reports and are important in the prevention of financial fraud. If we cannot produce reliable financial reports or prevent
fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information,
and there could be a material adverse effect on our stock price.

We believe that our
existing facilities are suitable and adequate to meet our current business requirements. The following table details our contracted
leasing terms for the current tenants of Marina Towers:

Tenant

Leased Space (sq. ft.)

Lease Term

Lease Expiration

Renewable Terms

Available

4,274

—

—

—

FCMG

13,796

7 years

04/20/2017

2-5 Year Options

FCMG

3,500

—

—

—

FCHS

5,106

7 Years

12/31/2017

2-5 Year Options

Tenant A

15,964

10 Years

3/31/2019

5 Year Option

Tenant B

1,454

10 Years

7/31/2018

—

Tenant C

6,591

5 Years

5/31/2018

5 Year Option

Tenant D

9,826

10 Years

7/31/2017

3-5 Year Options

Tenant E

7,540

6 Years

6/30/2015

3 Year Option

Tenant F

7,324

1 Year

6/30/2015

—

25

ITEM 3.

LEGAL PROCEEDINGS

From time to time,
we may become involved in lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is
subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our
business. Our contracts with hospitals generally requires us to indemnify them and their affiliates for losses resulting from the
negligence of our physicians.

Although we currently
maintain liability insurance coverage intended to cover professional liability and certain other claims, we cannot assure that
our insurance coverage will be adequate to cover liabilities arising out of claims asserted against us in the future where the
outcomes of such claims are unfavorable to us. Liabilities in excess of our insurance coverage, including coverage for professional
liability and certain other claims, could have a material adverse effect on our business, financial condition and results of operations.

On December 9, 2011,
FCID Medical, Inc., and First Choice Medical Group of Brevard, LLC, both wholly-owned subsidiaries of the Company, entered into
a five (5) year Billing and Collection Agreement (the “Agreement”) with MedTRX Health Care Solutions, LLC, and MedTRX
Collection Services LLC (collectively, “MedTRX”). Under the terms of the Agreement, MedTRX was to provide the Company
with proprietary IT billing and collection software systems.

On or about July 25,
2014, MedTRX Health Care Solutions, LLC and MedTRX Collection Services, LLC (“MedTRX”) filed a demand for arbitration
with the American Arbitration Association (“AAA”) against FCID Medical, Inc. and First Choice Medical Group of Brevard,
LLC (collectively, “First Choice”). MedTRX claims that First Choice breached an exclusive five year billing and
collection agreement dated as of December 9, 2011 (“Billing Agreement”) by engaging another billing service on or about
June 1, 2014. MedTRX also claims that First Choice failed to pay for services that MedTRX had performed prior to June 1,
2014, leaving a balance due of $93,280.84. MedTRX claims total damages of “not less than $3 million. On or about
September 15, 2014, First Choice served its Answering Statement and Counterclaims (“Answering Statement”). In
the Answering Statement, First Choice denies all liability to MedTRX due to MedTRX’s numerous material breaches of the Billing
Agreement and asserted two counterclaims for fraudulent inducement and negligence against MedTRX. First Choice seeks
damages of not less than $2 Million against MedTRX.

However, no assurance can be given that any amounts ultimately due by the Company will
not have a material impact on the Company's financial condition. Colin Halpern, a former member of our Board of Directors, is the
Managing Member of MedTRX Provider Network, LLC, which is an affiliate of MedTRX.

On April 10, 2014,
the Company terminated the employment of Dr. David E. Dominguez in accordance with the terms of his five (5) year Employment Agreement
dated September 26, 2013 (the “Employment Agreement”). Dr. Dominguez, on June 5, 2014, commenced an action
against the Company in the Circuit Court of the Eighteenth Judicial Circuit In and For Brevard County, Florida, alleging that his
termination was in breach of the Employment Agreement. The action was settled by Agreement dated September 4, 2014, with no settlement
cost to the Company, without either party admitting any liability, and the filing of Joint Stipulation of Dismissal.

Our Common Stock is
currently quoted on the OTCQB, the OTC market tier for companies that report to the SEC under the symbol “FCHS.”

The following table
sets forth, for the period indicated, the quarterly high and low per share sales prices (per share of our the common stock for
each quarter during our last two fiscal years as reported by the OTCQB):

2014

High

Low

First Quarter

$

3.50

$

1.19

Second Quarter

$

2.92

$

1.40

Third Quarter

$

1.75

$

0.81

Fourth Quarter

$

1.32

$

1.00

2013

High

Low

First Quarter

$

2.20

$

1.00

Second Quarter

$

1.75

$

0.05

Third Quarter

$

1.35

$

0.40

Fourth Quarter

$

2.10

$

1.00

The above information
was obtained from NASDAQ.com. Because these are over-the-counter market quotations, these quotations reflect inter-dealer prices,
without retail mark-up, markdown or commissions and may not represent actual transactions. There is currently no public trading
market for our preferred stock.

As of March 30, 2015,
we had approximately 436 individual shareholders of record of our common stock, and the closing sales price on that date for our
common stock was $1.13 per share. We believe that the number of beneficial owners of our common stock is greater than the number
of record holders, because a number of shares of our common stock is held through brokerage firms in “street name.”

Dividend Policy

The Company has never
declared or paid any cash dividends on its common stock. We have never paid cash dividends on our common stock. Under Delaware
law, we may declare and pay dividends on our capital stock either out of our surplus, as defined in the relevant Delaware statutes,
or if there is no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding
fiscal year. If, however, the capital of our company, computed in accordance with the relevant Delaware statutes, has been diminished
by depreciation in the value of our property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital
represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets, we are prohibited
from declaring and paying out of such net profits and dividends upon any shares of our capital stock until the deficiency in the
amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets
shall have been repaired. The Company does not intend to declare or pay any cash dividends on its common stock in the foreseeable
future. The holders of the Company's common stock are entitled to receive only such dividends (cash or otherwise) as may be declared
by the Company's Board of Directors.

Recent Sales of Unregistered Securities

CCR of Melbourne - Conversion of Debt to Equity

On February 1, 2012,
the Company opened a $500,000 unsecured, revolving line of credit loan with CCR of Melbourne, Inc., an entity jointly owned and
controlled at that time by Christian “Chris” Romandetti, the Company's Chief Executive Officer, and Carmen Charles
Romandetti, our CEO's father. The revolving line of credit loan was to mature on October 1, 2015 with interest at a per annum rate
of 8.5% beginning March 1, 2012. Advances on the line of credit were at the sole discretion of CCR of Melbourne, Inc. On November
8, 2013, CCR converted the then outstanding balance of $142,483.52, representing all of the outstanding related party principal
and interest amount on the loan, into shares of the Company's common stock at a price equal to $0.45 per share for a total of 316,631
shares issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act of 1933 (the “Securities
Act”). On November 8, 2013, Chris Romandetti relinquished all rights, title to and ownership in CCR to Carmen Romandetti
in consideration of repayment of a personal loan made to Chris Romandetti by Carmen Romandetti.

27

MTI Capital - Conversion of Debt to Equity

On May 1, 2013, the
Company entered into a loan commitment whereby MTI Capital LLC (“MTI”) provided a line of credit up to $2,000,000 in
the form of a convertible loan with interest at 12% per annum, payable monthly with principal due two years from the effective
date of the loan. On August 28, 2013, the Company amended the loan agreement to change the conversion rate from $0.75 per share
to $0.45 per share.

On November 8, 2013,
MTI converted the then outstanding balance of $624,000 principal and interest amount on the loan, into restricted shares of the
Company's common stock, in reliance upon the exemption from registration under Section 4(a)(2), at a price equal to $0.45 per share
for a total of 1,386,667 shares issued. Our transfer agent reported to us that MTI redistributed the majority of its shares in
our Company to unaffiliated third parties.

On June 13, 2013, we
entered into a Loan and Security Agreement (the “Loan Agreement”) with CT Capital, Ltd., d/b/a CT Capital, LP, a Florida
limited liability partnership (the “Lender”). Under the Loan Agreement, the Lender committed to make an accounts receivable
line of credit in the maximum aggregate amount of $1,500,000 to the Company with an interest rate of 12% per annum (the “Loan”).
The maturity date of the Loan is December 31, 2016 (the “Maturity Date”). Interest shall be due and payable monthly.
Upon default, the interest may be adjusted to the highest rate permissible by law. The Loan is secured by the accounts receivable
and assets of the Company. The assets constituted the collateral for the repayment of the Loan. The Loan Agreement also included
covenants, representations, warranties, indemnities and events of default that are customary for facilities of this type. The advance
rate was defined as: 80% of all receivables to be 120 days or less at the true collection rate of approximately 27% of total billings,
excluding patient billings and collections. Additionally, allowable accounts also included 50% of all accounts protected by Legal
Letters of Protection. At any time up until December 31, 2016, the Lender may convert all or any portion of the outstanding principal
amount or interest on the Loan into the common stock of the Company at a price equal to $0.75 per share.

On November 8, 2013,
in consideration for a fee of 100,000 shares of the Company's common stock, issued in reliance upon the exemption from registration
under Section 4(a)(2) of the Securities Act, CT Capital agreed to modify the line of credit to the Company's subsidiary, First
Choice Medical Group of Brevard, LLC. Under the loan modification agreement, the annual rate of interest was reduced from 12% per
annum to 6% per annum and will remain at 6% until November 1, 2015. All other terms under the June 13, 2013 Loan and Security Agreement
will remain the same.

The obligations of
the Company under the Loan Agreement are guaranteed by certain affiliates of the Company, including a personal guarantee issued
by the Company’s Chief Executive Officer.

During the year ended
December 31, 2014, the Company issued 200,000 shares of its common stock upon the election by Lender to convert $150,000 of outstanding
principal amount under the line of credit.

Convertible Notes

On December 14, 2012,
February 19, 2013, and August 14, 2013, the Company entered into Securities Purchase Agreements for the sale of 8% convertible
notes in the original principal amounts of $203,500, $103,500 and $153,500, respectively, with a lender in reliance upon the exemption
from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). During the
year ended December 31, 2013, the Company paid off each of these notes payable in cash.

Acquisition of Patent

On September 7, 2013,
the Company acquired a patent, US 7,789,842 B2, for an orthopedic adjustable arm sling from Donald A. Bittar, the inventor and
the Company's Chief Financial Officer. Based on the independent, third party evaluation of Professional Business Brokers, Inc.,
the patent was valued at $286,500. The Company issued, in reliance upon the exemption from registration under Section 4(a)(2) of
the Securities Act, to Mr. Bittar 636,666 shares of its common stock, valued at $286,500, or $0.45 per share, which was estimated
to approximate the fair value of the patent acquired and did not materially differ from the fair value of the common stock at the
time of issuance.

28

Elite Financial Services — Equity Compensation
for Services

On
October 2, 2013, the Company entered into a cancelable 12-month agreement (the “Agreement”) to engage the services
of Elite Financial Communications Group, LLC, d/b/a HanoverElite (“HanoverElite”). The Agreement provided for a monthly
cash retainer; and 300,000 restricted shares of the Company's common stock, to be earned and issued quarterly as follows: 37,500
shares on January 3, 2014, April 3, 2014, and July 3, 2014; and 187,500 shares on October 3, 2014. In July 2014, the Company terminated
the services of HanoverElite. In accordance with the terms of the Agreement, the Company issued an aggregate of 112,500 shares
of its common stock at a cost of $125,368. The shares were issued in reliance upon the exemption from registration under Section
4(a)(2) of the Securities Act.

Elite
Stock Research — Equity Compensation for Services

On
September 18, 2014, the Company entered into a cancelable 4-month agreement (the "Agreement") to engage the services
of Elite Stock Research, Inc. The Agreement provided for a monthly cash retainer, and 100,000 restricted shares of the Company’s
common stock that were issued in 2014 at a cost of $98,000. The shares were issued in reliance upon the exemption from registration
under Section 4(a)(2) of the Securities Act.

Hillair Capital Investments, L.P. — Convertible
Debenture

On November 8, 2013,
the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Hillair Capital
Investments L.P. (“Hillair”) whereby the Company received $2,000,000 in gross proceeds from Hillair in exchange for
(i) a $2,320,000, 8% Original Issue Discount Convertible Debenture due December 28, 2013, subject to an extension through November
1, 2015 (the “Debenture”), and (ii) a Common Stock Purchase Warrant (the “Warrant”) to purchase up to 2,320,000
shares of the Company's common stock (the “Common Stock”) at an exercise price of $1.35 per share, which may be exercised
on a cashless basis, until November 8, 2018.

The Company issued
to Hillair the Debenture with the Warrant, pursuant to Section 4(a)(2) of the Securities Act, for the net purchase price of $2,000,000
(reflecting the $320,000 original issue discount). Until the Debenture is no longer outstanding, the Debenture shall be convertible,
in whole or in part at the option of Hillair, into shares of Common Stock, subject to certain conversion limitations set forth
in the Debenture. The Company, however, has reserved the right to pay the Debenture in cash. The conversion price for the Debenture
is $1.00 per share, subject to adjustment for stock splits, stock dividends, sales of securities for less than $1.00 per share
of common stock or other distributions by the Company. As a result of the Company achieving certain milestones, however, the conversion
price shall not be reduced to less than $1.00 per share as a result of any subsequent sales of securities for less than $1.00 per
share of common stock.

The Company will be
obligated to redeem $580,000 of principal on February 1, 2015, May 1, 2015, August 1, 2015 and November 1, 2015, plus accrued but
unpaid interest and any other amounts that may be owed to the holder of the Debenture on those dates. Interest on the Debenture
accrues at the rate of 8% annually and is payable quarterly on August 1, November 1, February 1, and May 1, beginning on August
1, 2014. Interest is payable in cash or at the Company's option in shares of the Company's common stock; provided certain conditions
are met.

On or after May 8,
2014, the Company may elect to prepay any portion of the principal amount of the Debenture, subject to providing advance notice
to the holder of the Debenture, at 120% of the then outstanding principal amount of the Debenture, plus accrued but unpaid interest
and any other amounts then owed to the holder of the Debenture as further set forth therein, subject to certain conditions set
forth in the Debenture.

To secure the Company's
obligations under the Debenture, the Company granted Hillair a security interest in certain of its and its subsidiaries' assets
in the Company as described in the Security Agreement. In addition, certain of the Company's subsidiaries agreed to guarantee the
Company's obligations pursuant to the subsidiary guarantees.

On May 9, 2014, Hillair
elected to convert the aggregate amount of $104,000 of its Debenture, representing $100,000 of principal and $4,000 in interest
into 104,000 shares of the Company’s common stock. The shares were issued in reliance upon the exemption from registration
under Section 4(a)(2) of the Securities Act.

On June 30, 2014, Hillair
elected to convert the aggregate amount of $104,700 of its Debenture, representing $100,000 of principal and $4,700 of interest,
into 104,700 shares of the Company’s common stock. The shares were issued in reliance upon the exception from registration
under Section 4(a)(2) of the Securities Act.

29

On August 4, 2014,
Hillair elected to convert accrued interest of $127,857 into 127,857 shares of the company’s common stock. The shares were
issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

On April 9, 2015 Hillair Capital Investments L.P. (“Hillair”)
agreed to further modify the redemption terms of the 8% Original Issue Discount Secured Convertible Debenture (the “Debenture”)
as follows. The Company shall remit $580,000 principal amount of the Debenture on or before May 1, 2015 (originally
due February 1, 2015); in consideration of reducing the conversion price of $100,00 principal amount of the Debenture from
$1.00 to $0.50 per share, the $580,000 principal amount of the Debenture plus interest due May 1, 2015 is extended to August 1,
2015.

Additionally, the modification provides the Company, upon the payment of $150,000 (on or before July 1,
2015) and the reduction of the exercise price of the 2,320,000 warrants issued to Hillair from $1.35 per share to $1.00 per share,
to extend the $580,000 principal amount of the Debenture plus interest due August 1, 2015 and the balance of the principal amount
of the Debenture plus interest due November 1, 2015 until January 15, 2016. Reducing the exercise price of the warrants
would increase the number of warrants granted to Hillair by 601,481.

Purchases by Issuer and Its Affiliates

None.

ITEM 6.

SELECTED FINANCIAL DATA

This item is not required
for Smaller Reporting Companies.

ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion
highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity
and capital resources for the periods described. This discussion should be read in conjunction with our Consolidated Financial
Statements and the related notes included in Item 8 of this Form 10-K. This discussion contains forward-looking statements. Please
see the explanatory note concerning “Forward-Looking Statements” in Part I of this Annual Report on Form 10-K and Item
1A. Risk Factors for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.
The operating results for the periods presented were not significantly affected by inflation.

Overview

First Choice Healthcare
Solutions, Inc. (“FCHS,” the “Company,” “we,” “our,” or “us”) is engaged
in the creation of state-of-the-art multi-specialty “Medical Centers of Excellence,” primarily in select markets in
the southeastern and western parts of the United States. We intend to own and operate these “Medical Centers of Excellence”
under the FCHS brand.

We believe that by
integrating the synergistic mix of orthopaedic, neurology and interventional pain specialties with related diagnostic and ancillary
services and state-of-the-art equipment and technologies all in one location or “Medical Center of Excellence,” we
are able to:

Our goal is to
build a network of non-physician and physician-owned and operated Medical Centers of Excellence in diverse locations,
primarily throughout the southeastern and western parts of the United States. By centralizing current and future
Centers’ business management functions, including call center operations, scheduling, billing, compliance, accounting,
marketing, advertising, legal, information technology and record-keeping, at our corporate headquarters, we will maintain
efficiencies and scales of economies. We believe our structure will enable our staff physicians to focus on the practice of
medicine and the delivery of quality care to the patients we serve, as opposed to having their time and attention focused on
business administration responsibilities. We currently have 48 employees, including physicians and physician assistants.

Our Healthcare Services Business

We currently own and
operate First Choice Medical Group of Brevard, LLC (“FCMG”), our model multi-specialty Medical Center of Excellence.
FCMG will serve as the model for replicating our “Medical Centers of Excellence” strategy in our target expansion markets.
Located in Melbourne, Florida, FCMG specializes in the delivery of musculoskeletal medicine, via our strategically aligned subspecialties
in orthopaedics, neurology and interventional pain medicine, coupled with on-site diagnostic and ancillary services, including
MRI, X-ray, DME and rehabilitative care with multiple quality-focused goals centered on enriching our patients’ care experiences.

30

Critical Accounting Policies

Basis of Accounting

The financial statements
of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
The preparation of these financial statements requires our management to make estimates and assumptions about future events that
affect the amounts reported in the financial statements and related notes. Future events and their effects cannot be determined
with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. We believe the following
critical accounting policies affect its more significant judgments and estimates used in the preparation of financial statements.

Revenue Recognition

The Company recognizes
revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which
requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists;
(2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination
of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered
and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are recorded.

ASC 605-10 incorporates
Accounting Standards Codification subtopic 605-25, Multiple-Element Arraignments (“ASC 605-25”). ASC 605-25 addresses
accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets.
The effect of implementing 605-25 on the Company's financial position and results of operations was not significant.

Patient Service Revenue

The Company recognizes
patient service revenue associated with services provided to patients who have third-party payor coverage on the basis of contractual
rates for the services provided. For uninsured or self-pay patients that do not qualify for charity care, the Company recognizes
revenue on the basis of its standard rates for services provided (or on the basis of discounted rates, if negotiated or provided
by policy). On the basis of historical experience, a portion of the Company’s patient service revenue may be potentially
uncollectible due to patients who are unable or unwilling to pay for the services provided or the portion of their bill for which
they are responsible. Thus, the Company records a provision for bad debts related to potentially uncollectible patient service
revenue in the period the services are provided.

Rental Revenue

FCID Holdings,
Inc. has one real estate holding, Marina Towers, LLC, a 78,000 square foot, Class A, six-story building located on the Indian
River in Melbourne, Florida. In addition to housing our corporate headquarters and First Choice-Brevard, the building, which
averages 95% annual occupancy, also leases approximately 48,698 square feet of commercial space to third party tenants. The
Company recognizes rental revenue associated with the period of time the facility is leased at the contractual lease rates
(or on the basis of discounted rates, if negotiated).

Derivative Financial Instruments

Accounting Standards
Codification subtopic 815-40, Derivatives and fledging, Contracts in Entity's own Equity (“ASC 815-40”) became effective
for the Company on October 1, 2009. The Company's convertible debt has conversion provisions based on a discount the market price
of the Company's common stock.

31

Stock-Based Compensation

Share-based compensation
issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the
requisite service period. The Company measures the fair value of the share-based compensation issued to non-employees using the
stock price observed in the arms-length private placement transaction nearest the measurement date (for stock transactions) or
the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair
value than the value of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for
performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance
is complete.

Income Tax

The Company accounts
for income taxes pursuant to Accounting Standards Codified 740 (“ASC 740”). Under ASC 740 deferred taxes are provided
on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry
forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Results of Operations

Year Ended December 31, 2014 as Compared to Year Ended
December 31, 2013

Results of Operations

The following is a
discussion of the results of operations for the year ended December 31, 2014 compared to the year ended December 31, 2013.

Revenues

Total revenues
increased 32% to $8,102,602 for the year ended December 31, 2014, compared to revenue of $6,142,827 for the year ended
December 31, 2013. The increase in revenue is primarily due to the 30% increase in net patient service revenue. After
factoring a $912,782 allowance for bad debts, net patient service revenue climbed to $7,053,603 for the year ended December
31, 2014. This compared to $5,094,358 for the year ended December 31, 2013, after factoring for a provision for bad
debts of $365,015. The increase in net patient service revenue is attributable to the growth of the medical practice.

Operating Expenses

Operating expenses
include the following:

Year Ended 12/31/2014

Year Ended 12/31/2013

Salaries and Benefits

$

4,761,573

$

3,096,285

Other operating expenses

1,897,780

1,350,927

General and administrative

2,434,259

1,705,154

Impairment of investment

—

450,000

Depreciation and amortization

552,084

518,611

Total operating expenses

$

9,645,696

$

7,120,977

The major components
of operating expenses include practice salaries and benefits, practice supplies and other operating costs, depreciation and general
and administrative expenses, which included legal, accounting and professional fees associated with being a public entity.

Due to the growth of
our medical practice in 2014, salaries and benefits increased 54% to $4,761,573 for the year ended December 31, 2014 compared to
$3,096,285 for the year ended December 31, 2013. For the same reason, other operating expenses increased 41% to $1,897,780 from
$1,350,927.

32

General and administrative
expenses for the year ended December 31, 2014 increased 43% to $2,434,259 compared to $1,705,154, an increase attributable to expenses
related to our growth. This increase was largely attributable to higher corporate expenses related to the preparation and filing
of a registration statement on Form S-1 associated with the public offering that did not occur due to negative market conditions
which prevailed at that time; as well as higher corporate expenses related to our investments in strengthening our infrastructure
in anticipation of commencing the scaling and replication of our Medical Center of Excellence business model in 2015. We believe
that each additional sale or service and corresponding gross profit of such sale or service has minimal incremental offsetting
operating expenses. Thus, additional sales could contribute to profit at a higher rate of return on sales as a result of not needing
to expand operating expenses at the same pace as sales.

At December 31, 2013,
the Company's management performed an evaluation of its investment in MedTech for purposes of determining the implied fair value
of the asset at December 31, 2013. The test indicated that the recorded remaining book value of its investment exceeded its fair
value for the year ended December 31, 2013. As a result, upon completion of the assessment, management recorded a non-cash impairment
charge of $450,000, net of tax, or $0.03 per share during the year ended December 31, 2013, to reduce the carrying value of the
investment to $0.

Depreciation and amortization
increased 7% from $518,611 for the year ended December 31, 2013 to $552,084 for the year ended December 31, 2014.

Net Income (Loss) on Operations

The loss from operations
for the year ended December 31, 2014 increased 58% to $1,543,094, which compared to a loss from operations of $978,150 for the
prior year. Notwithstanding non-cash expenses totaling $1,632,577 for the 12 months in 2014, which included stock-based compensation,
depreciation and amortization, loss from operations totaled $856,962. This compared to income from operations of $597,250 after
factoring $1,575,400 in non-cash stock-based compensation, impairment of investment, depreciation and amortization recorded for
the full year 2013.

Interest Expense

Interest expense declined
measurably, decreasing76% to $866,701 for the year ended December 31, 2014, which compared to $3,704,086 for the year ended December 31,
2013. In 2013, the higher interest expense was largely a result of higher corporate interest expenses attributable to our borrowings
to grow our medical business and restructuring of our debt in the second half of 2013.

On November 8, 2013,
we entered into a securities purchase agreement with Hillair Capital Investments L.P. (“Hillair”) whereby the Company
issued Hillair (i) a $2,320,000, 8% original issue discount convertible debenture due initially due December 28, 2013, subsequently
extended through November 1, 2015 and (ii) a common stock purchase warrant to purchase up to 2,320,000 shares of the Company's
common stock. We issued detachable warrants granting the holder the right to acquire an aggregate of 2,320,000 shares of the Company's
common stock at $1.35 per share on a cashless basis. During the year ended December 31, 2013, the Company amortized $1,871,117
of the debt discount associated with the debenture and the warrant as interest expense.

Further, during the
years ended December 31, 2014 and 2013, the Company amortized and wrote off an aggregate of $0 and $2,706,869 of debt discount
to operations as interest expense, respectively.

Net Loss

As a result of all
the above, our net loss declined 47% to $2,489,539 for the year ended December 31, 2014, which compared to a net loss of $4,704,303
for the previous year.

Segment Results

The Company reports
segment information based on the “management” approach. The management approach designates the internal reporting used
by management for making decisions and assessing performance as the source of the Company's reportable segments. The following
are the revenues, operating expenses and net income (loss) by segment for the years ended December 31, 2014 and December 31, 2013.
The significant fluctuations in the line items are described above.

33

Summary Statement of Operations for the year ended December
31, 2014:

Marina Towers

FCID Medical

Corporate

Intercompany Eliminations

Total

Revenue:

Net patient service revenue

$

-

$

7,053,603

$

-

$

-

$

7,053,603

Rental revenue

1,483,948

-

-

(434,949

)

1,048,999

Total Revenue

1,483,948

7,053,603

-

(434,949

)

8,102,602

Operating expenses:

Salaries and benefits

12,000

3,733,140

1,016,433

-

4,761,573

Other operating expenses

430,041

1,902,688

-

(434,949

)

1,897,780

General and administrative

89,359

1,168,826

1,176,074

-

2,434,259

Depreciation and amortization

276,666

256,318

19,100

-

552,084

Total operating expenses

808,066

7,060,972

2,211,607

(434,949

)

9,645,696

Net income (loss) from operations:

675,882

(7,369

)

(2,211,607

)

-

(1,543,094

)

Interest expense

(451,962

)

(225,427

)

(189,312

)

-

(866,701

)

Amortization of financing costs

(57,348

)

(25,396

)

-

-

(82,744

)

Other income (expense)

3,000

-

-

-

3,000

Net Income (loss):

169,572

(258,192

)

(2,400,919

)

-

(2,489,539

)

Income taxes

-

-

-

-

-

Net income (loss)

169,572

(258,192

)

$

(2,400,919

)

$

-

$

(2,489,539

)

Summary Statement
of Operations for the year ended December 31, 2013:

Marina Towers

FCID Medical

Corporate

Intercompany Eliminations

Total

Revenue:

Net patient service revenue

$

-

$

5,094,358

$

-

$

-

$

5,094,358

Rental revenue

1,473,048

-

-

(424,579

)

1,048,469

Total Revenue

1,473,048

5,094,358

-

(424,579

)

6,142,827

Operating expenses:

Salaries and benefits

12,000

2,537,024

547,261

-

3,096,285

Other operating expenses

385,712

1,389,794

-

(424,579

)

1,350,927

General and administrative

82,186

669,248

953,720

-

1,750,154

Impairment of investment

-

-

450,000

-

450,000

Depreciation and amortization

164,884

353,727

-

-

518,611

Total operating expenses

644,782

4,949,793

1,950,981

(424,579

)

7,120,977

Net income (loss) from operations:

828,266

144,565

(1,950,981

)

-

(978,150

)

Interest expense

(464,250

)

(269,593

)

(2,970,243

)

-

(3,704,086

)

Amortization of financing costs

(57,348

)

-

-

-

(57,348

)

Gain on change in derivative liability

-

-

32,218

-

32,218

34

Marina Towers

FCID Medical

Corporate

Intercompany Eliminations

Total

Other income (expense)

3,063

-

-

-

3,063

Net Income (loss):

309,731

(125,028

)

(4,889,006

)

-

(4,704,303

)

Income taxes

-

-

-

-

-

Net income (loss)

$

309,731

$

(125,028

)

$

(4,889,006

)

$

-

$

(4,704,303

)

Liquidity and Capital Resources

As of December 31,
2014, we had cash of $279,087, restricted cash of $318,259 and accounts receivable totaling $1,804,636. This compared to cash of
$739,158, restricted cash of $256,246 and accounts receivable of $1,272,155 as of the end of 2013.

The Marina Towers building
is 95% occupied. We believe that ongoing operations of Marina Towers, LLC, the current positive cash balance along with continued
execution of Marina Tower's business development plan will allow us to further improve its working capital; and that it will have
sufficient capital resources to meet projected cash flow requirements through the date that is one year plus a day from the filing
date of this report. However, there can be no assurance that we will be successful in fully executing its business development
plan.

Net cash used in
our operating activities for the year ended December 31, 2014 totaled $363,937, which compared to net cash used in our
operations in 2013 of $1,264,058. The decrease in cash used was due primarily to $0 expenses booked for amortization of debt
discount in connection with our convertible note in 2014, compared to $2,706,869 in 2013, which was offset by higher
stock-based compensation – $912,782 compared to $361,284 in 2014 and 2013, respectively – and an increase in
accounts receivable, which grew by $1,445,263 as of the end of 2014, compared to $1,105,572 as of December 31, 2013. During
2014, the Company issued 536,557 shares of its common stock for line of credit, notes payable and accrued interest for $486,557.
During 2013 the Company reported an impairment of investment of $450,000 as compared to no impairment in 2014.

Net cash flows used
in investing activities was $145,225 for the year ended December 31, 2014, compared to $372,186 used in investing activities for
the year ended December 31, 2013. The decrease was due to less cash spent on the purchase of equipment in 2014 compared to the
prior year.

Cash flows provided
by financing activities was $49,091 for year ended December 31, 2014, compared to net cash provided by financing activities of
$2,308,357 for the year ended December 31, 2013. The cash flows provided by financing activities were the result of:

Year
ended

12/31/2014

Year
ended

12/31/2013

Net (payments) proceeds from related party line of credit

$

—

$

(10,846

)

Proceeds from advances

224,000

—

Proceeds from convertible note payable

—

2,128,117

Proceeds from lines of credit

587,000

1,373,208

Proceeds from issuance of notes payable, net of financing costs

—

152,659

Net payments on notes payable

(761,909

)

(1,334,781

)

Net cash provided by financing activities

49,091

2,308,357

On June 13 2013, we
entered into a Loan and Security Agreement (the “Loan Agreement”) with CT Capital. Ltd., d/b/a CT Capital, LP, a Florida
limited liability partnership (the “Lender”). Under the Loan Agreement, the Lender has committed to make an accounts
receivable line of credit in the maximum aggregate amount of $1,500,000 to the Borrower with an interest rate of 12% per annum
(the “Loan”). The maturity date of the Loan is December 31, 2016 (the “Maturity Date”). Interest shall
be due and payable monthly. Upon default, the interest may be adjusted to the highest rate permissible by law. The Loan is secured
by the accounts receivable, among other assets of the Borrower, and our assets. The assets constitute the collateral for the repayment
of the Loan. The Loan Agreement also includes covenants, representations, warranties, indemnities and events of default that are
customary for facilities of this type. The advance rate is defined as: 80% of all receivables to be 120 days or less at the true
collection rate of approximately 27% of total billings, excluding patient billings and collections. Additionally, allowable accounts
will also include 50% of all accounts protected by Legal Letters of Protection. At any time, the Lender may convert all or any
portion of the outstanding principal amount or interest on the Loan into our common stock at a price equal to $0.75 per share.
.. The Company did not record an embedded beneficial conversion feature in the note since the fair value of the common stock did
not exceed the conversion rate at the date of commitment.

35

On November 8, 2013,
in consideration for a fee of 100,000 shares of our common stock, restricted pursuant to Rule 144, CT Capital agreed to modify
the line of credit to our subsidiary, First Choice Medical Group of Brevard, LLC. Under the loan modification agreement, the annual
rate of interest was reduced from 12% per annum to 6% per annum and will remain at 6% until November 1, 2015. All other terms under
the June 13, 2013 Loan and Security Agreement will remain the same

On November 8, 2013,
the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Hillair Capital
Investments L.P. ("Hillair") in exchange for the issuance of (i) a $2,320,000, 8% original issue discount convertible
debenture, which was originally due on December 28, 2013 and subsequently extended on December 28, 2013 through November 1, 2015
(the “Debenture”), and (ii) a common stock purchase warrant (the “Warrant”) to purchase up to 2,320,000
shares of the Company’s common stock at an exercise price of $1.35 per share, which may be exercised on a cashless basis,
until November 8, 2018. The Debenture and the Warrant may not be converted if such conversion would result in Hillair beneficially
owning in excess of 4.99% of the Company’s common stock. Hillair may waive this 4.99% restriction with 61 days’ notice
to the Company.

The Company issued
to Hillair the Debenture with the Warrant for the net purchase price of $2,000,000 (reflecting the $320,000 original issue discount
of the Debenture). Until the Debenture is no longer outstanding, the Debenture is convertible, in whole or in part at the option
of Hillair, into shares of common stock, subject to certain conversion limitations set forth above. The Company, however, has reserved
the right to pay the Debenture in cash. The conversion price for the Debenture is $1.00 per share, subject to adjustment for stock
splits, stock dividends, and sales of securities for less than $1.00 per share or other distributions by the Company. As a result
of the Company achieving certain milestones set forth in the Securities Purchase Agreement, however, the conversion price of the
Debenture will not be reduced to less than $1.00 per share as a result of any subsequent sales of securities for less than $1.00
per share of common stock.

The Company will be
obligated to redeem $580,000 of principal on April 1, 2015 (see Subsequent Events), May 1, 2015, August 1, 2015 and November 1,
2015, plus accrued but unpaid interest and any other amounts that may be owed to the holder of the Debenture on those dates. Interest
on the Debenture accrues at the rate of 8% annually and is payable quarterly on August 1, November 1, February 1, and May 1, beginning
on August 1, 2014. Interest is payable in cash or at the Company’s option in shares of the Company’s common stock,
provided certain conditions are met. The August 1st and November 1st 2014 payments have been made.

On or after May 8,
2014, subject to certain conditions set forth in the Debenture, the Company may elect to prepay any portion of the principal amount
of the Debenture, subject to providing advance notice to the holder of the Debenture, at 120% of the then outstanding principal
amount of the Debenture, plus accrued but unpaid interest and any other amounts then owed to the holder of the Debenture as further
set forth therein.

To secure the Company’s
obligations under the Debenture, the Company granted Hillair a security interest in certain of its and its subsidiaries’
assets in the Company as described in the Securities Purchase Agreement. In addition, certain of the Company’s subsidiaries
agreed to guarantee the Company’s obligations pursuant to the guaranty agreements.

In connection with
the issuance of the Debenture, the Company issued the Warrant, granting the holder the right to acquire an aggregate of 2,320,000
shares of the Company’s common stock at $1.35 per share. In accordance with ASC 470-20, the Company recognized the value
attributable to the Warrant and the conversion feature of the Debenture in the amount of $1,871,117 to additional paid-in capital
and a discount against the notes. The Company valued the warrants in accordance with ASC 470-20 using the Black-Scholes pricing
model and the following assumptions: contractual terms of 3.6 years, an average risk free interest rate of 1.42%, a dividend yield
of 0%, and volatility of 147.94%. During the year ended December 31, 2013, the Company amortized $1,871,117 of the debt discount
to operations as interest expense.

On April 30, 2014,
Hillair agreed to waive its right to participate in the Company’s future financings for a certain time period and under certain
circumstances, as disclosed in the Company’s Registration Statement on Form S-1, filed with the Securities and Exchange Commission
on May 1, 2014.

36

On May 9, 2014 Hillair
elected to convert the aggregate amount of $104,000 of its Debenture, representing $100,000 of principal and $4,000 in interest
into 104,000 shares of the Company’s common stock.

On June 30, 2014, Hillair elected to convert
the aggregate amount of $104,700 of its Debenture, representing $100,000 of principal and $4,700 of interest, into 104,700 shares
of the Company’s common stock. On August 4, 2014, Hillair elected to convert accrued interest of $127,857 into 127,857 shares
of the Company’s common stock.

On April 9, 2015 Hillair Capital Investments L.P. (“Hillair”)
agreed to further modify the redemption terms of the 8% Original Issue Discount Secured Convertible Debenture (the “Debenture”)
as follows. The Company shall remit $580,000 principal amount of the Debenture on or before May 1, 2015 (originally
due February 1, 2015); in consideration of reducing the conversion price of $100,00 principal amount of the Debenture from
$1.00 to $0.50 per share, the $580,000 principal amount of the Debenture plus interest due May 1, 2015 is extended to August 1,
2015.

Additionally, the modification provides the Company, upon the payment of $150,000 (on or before July 1,
2015) and the reduction of the exercise price of the 2,320,000 warrants issued to Hillair from $1.35 per share to $1.00 per share,
to extend the $580,000 principal amount of the Debenture plus interest due August 1, 2015 and the balance of the principal amount
of the Debenture plus interest due November 1, 2015 until January 15, 2016. Reducing the exercise price of the warrants
would increase the number of warrants granted to Hillair by 601,481.

Currently, we are actively
engaged in identifying and pursuing discussions with prospective acquisitions in key target markets — with those being largely
in the southeastern U.S. Over the next 12 months, we expect to incur significant capital costs to further develop and expand operations.
We plan to add another medical center of excellence and purchase additional diagnostic equipment for our operations. We expect
to need additional capital of approximately $4-6 million to fund the development and expansion of our operations in 2014. However,
there can be no assurance that we will be able to negotiate acceptable terms for, or find suitable candidates for, such acquisition.

There can be no assurance
that our cash flow will increase in the near future from anticipated new business activities, or that revenues generated from our
existing operations will be sufficient to allow us to continue to pursue new customer programs or profitable ventures.

Contractual Obligations

At December 31, 2014,
we had certain obligations and commitments under our loans and capital leases totaling approximately $8,917,351 as follows:

Total

2015

2016

2017

2018 and Later

Leases

$

1,499,594

$

465,603

$

495,654

$

519,600

$

18,737

Loans

7,417,757

267,188

7,146,853

3,716

Total

$

8,917,351

$

732,791

$

7,642,507

$

523,316

$

18,737

Inflation

Our opinion is that
inflation has not had, and is not expected to have, a material effect on our operations.

Climate Change

Our opinion is that
neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any material
effect on our operations.

Off-Balance Sheet Arrangements

At December 31, 2014,
we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures
or capital resources.

New Accounting Pronouncements

There were various
updates recently issued, most of which represented technical corrections to the accounting literature or application to specific
industries and are not expected to a have a material impact on the Company's condensed consolidated financial position, results
of operations or cash flows.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

This Item is not required
for a Smaller Reporting Company.

37

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements
are contained in pages F-1 through F-26, which appear at the end of this Annual Report on Form 10-K.

ITEM 9. CHANGES IN
AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure and Control Procedures

The Company's Chief
Executive Officer and the Company's Chief Financial Officer evaluated the effectiveness of the Company's disclosure controls and
procedures as of December 31, 2014 and had concluded that the Company's disclosure controls and procedures are effective. The term
disclosure controls and procedures means controls and other procedures that are designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is
recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated
to the Company's management, including its principal executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required disclosure.

Management's Report on Internal Control over Financial Reporting

The Company's management
is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in
Rule 13a-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with Generally
Accepted Accounting Principles (“GAAP”).

Because of its inherent
limitations, a system of internal control over financial reporting can provide only reasonable assurance of such reliability and
may not prevent or detect misstatements. Also, projection of any evaluation of effectiveness to future periods is subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

Management has conducted,
with the participation of our Chief Executive Officer and our Chief Financial Officer, an assessment of the effectiveness of our
internal control over financial reporting as of December 31, 2014. Management's assessment of internal control over financial reporting
used the criteria set forth in SEC Release 33-8810 based on the framework established by the Committee of Sponsoring Organizations
of the Treadway Commission (“COSO”) in Internal Control over Financial Reporting — Guidance for Smaller Public
Companies. Based on this evaluation, Management concluded that our system of internal control over financial reporting was
effective as of December 31, 2014, based on these criteria.

This Annual Report
on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control
over financial reporting. As a smaller reporting company, our management's report was not subject to attestation by our registered
public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only the management's
report.

Changes in Internal Control over Financial Reporting

There were no changes
in our internal control over financial reporting, as defined in Rules 13a-15(t) and 15d-15(f) under the Exchange Act, during the
fourth quarter of the year ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

38

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE

The following table
and biographical summaries set forth information, including principal occupation and business experience about our directors and
executive officers:

Name

Age

Position

Officer and/or Director Since

Christian C. Romandetti

54

President, Chief Executive Officer and Director

December 2010

Gary D. Pickett1

63

Chief Financial Officer, Treasurer and Secretary

November 2014

Donald A. Bittar2

73

Director & Interim Chief Financial Officer, Treasurer and Secretary

December 2010

Colin Halpern3

77

Director

November 2012

1 Mr. Picket was appointed
on November 3, 2014 by the Company’s Board of Directors as Chief Financial Officer, Treasurer and Secretary. On March 2,
2015, the Company’s Board of Directors and Mr. Pickett mutually agreed to release Mr. Pickett from the Company’s employment
to pursue other career opportunities.

2 Subsequent to the
end of 2014, Mr. Bittar was appointed by the Board of Directors as Interim Chief Financial Officer, Treasurer and Secretary, following
the release of Mr. Pickett from the Company’s employment on March 2, 2015.

3 Mr. Halpern resigned
as Director of the Company in September 2014.

Christian “Chris”
Romandetti — President and Chief Executive Officer

A serial entrepreneur
and proven senior executive with experience in a broad range of industries, Mr. Romandetti has served as First Choice Healthcare
Solution's Chairman, President and CEO since December 2010. In this role, he is responsible for articulating the Company's vision
and executing strategies that place clinically superior, patient-centric care and improved clinical outcomes at the core of FCHS's
corporate mission.

Since 2003 through
to the present, Mr. Romandetti has been the Managing Member of Marina Towers, LLC, which is now a wholly owned subsidiary of FCHS;
and the Managing Member of C&K, LLC, a property holding company. Since 2007, he has also lent his business building expertise
to medical practices and MRI centers as a professional business consultant to the healthcare industry. Previously, he was a founding
director of Sunrise Bank, a community bank serving local businesses in Florida's Space Coast and served as an executive officer
for numerous companies in the real estate, marine, automotive and construction products industries.

39

Donald A. Bittar — Director and Interim Chief Financial
Officer4

In December 2010, Mr.
Bittar was appointed as the Company's CFO, Treasurer and Secretary and a member of the Board of Directors. Upon the appointment
of Mr. Pickett, Mr. Bittar retired as the Company’s Chief Financial Officer, Treasurer and Secretary. Subsequent to the year
ended December 31, 2014, Mr. Bittar was reappointed as Interim Chief Financial Officer, Treasurer and Secretary, following the
mutually agreed upon release of Mr. Pickett from First Choice’s employment. Mr. Bittar brings First Choice Healthcare Solutions
more than 30 years' experience working with companies as an officer, board member and consultant. Before joining the FCHS leadership
team, Mr. Bittar served as President and Chairman of Associated Mortgage of North America and President of DA Bittar and Associates,
Inc., a management and technology consulting firm that he founded in 1980. From 1969 to 1980, he was Chairman, President and CEO
of Marine Telephone, Inc. Since 1969, he has also taught finance, management and information technology at several leading undergraduate
and graduate schools. Currently, Mr. Bittar is an Adjunct Professor at Florida Institute of Technology, College of Business, where
he was honored as Teacher of the Year in 2013.

In addition to authoring
Getting Under the Hood of an Annual Report and Knowing What is Inside, Mr. Bittar invented and was granted a U.S. patent
for an adjustable sling that can be used to hold a patient's arm, wrist and hand in multiple positions while eliminating stress
to the neck and shoulder. He has been a frequent speaker at the National Association of Mortgage Bankers, National Council of Savings
Institutions, Council of Presidents, New England Bankers Association and National Corporate Cash Managers Association. Donald received
a Master of Business Administration degree from Long Island University.

Gary D. Pickett
– Chief Financial Officer, Treasurer and Secretary5

Gary D. Pickett, a
certified public accountant, holds an MBA from the University of Tampa, a BS degree in Accounting from Florida State University,
and has served four years as a field artillery officer in the United States Army. From March 2006 to May 2014, Mr. Pickett served
as a senior financial executive with Bovie Medical Corporation (NYSE:BVX), a microcap publicly-traded medical manufacturing company,
including as their Chief Financial Officer, Secretary and Treasurer. Prior to joining Bovie, Mr. Pickett held positions with Progress
Energy Services of Raleigh, NC (Director of Financial Systems), and with Progress Rail Services, a subsidiary of Progress Energy
Services in Albertville, AL (Vice-President and Controller). Mr. Pickett has extensive experience in Sarbanes-Oxley implementation
as well as GAAP accounting and SEC Reporting. Subsequent to the year ended December 31, 2014, Mr. Pickett and First Choice mutually
agreed to release Mr. Pickett from First Choice’s employment to pursue other career opportunities.

Board of Directors' Term of Office

Directors are elected
at our annual meeting of shareholders and serve for one year until the next annual meeting of shareholders or until their successors
are elected and qualified.

Family Relationships

There are no family
relationships among the officers and directors, nor are there any arrangements or understanding between any of the Directors or
Officers of our Company or any other person pursuant to which any Officer or Director was or is to be selected as an officer or
director.

4 Subsequent to the
end of 2014, Mr. Bittar was appointed by the Board of Directors as Interim Chief Financial Officer, Treasurer and Secretary, following
the release of Mr. Pickett from the Company’s employment on March 2, 2015.

5 Mr. Picket was appointed
on November 3, 2014 by the Company’s Board of Directors as Chief Financial Officer, Treasurer and Secretary. On March 2,
2015, the Company’s Board of Directors and Mr. Pickett mutually agreed to release Mr. Pickett from the Company’s employment
to pursue other career opportunities.

40

Involvement in Certain Legal Proceedings

During the last ten
years, none of our officers, directors, promoters or control persons have been involved in any legal proceedings as described in
Item 401(f) of Regulation S-K.

Board Meetings; Committee Meetings; and Annual Meeting Attendance

During 2014, the Board
of Directors held 9 meetings. Each meeting was attended by all of the members of the Board.

Committees of the Board of Directors

There are no committees
of the Board of Directors.

Changes in Nominating Process

There are no material
changes to the procedures by which security holders may recommend nominees to our Board of Directors.

Shareholder Recommendations for Board Nominees

The Board does not
have a Governance or Nominating Committee that is tasked with identifying individuals qualified to become Board members and recommending
to the Board the director nominees for the next annual meeting of shareholders. Until such committee is formed, the shareholder
recommendations for Board nominees would be directed to the entire Board, who will consider the qualifications of the person recommended
based on a variety of factors, including:

•

the appropriate size and the diversity of our Board;

•

our needs with respect to the particular talents and experience of our directors;

•

the knowledge, skills and experience of nominees, including experience in technology, business,
finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience
already possessed by other members of the Board;

•

experience with accounting rules and practices;

•

whether such person qualifies as an “audit committee financial expert” pursuant to
the SEC Rules;

•

appreciation of the relationship of our business to the changing needs of society; and

•

the desire to balance the considerable benefit of continuity with the periodic injection of the
fresh perspective provided by new members.

Compliance with Section 16(A) of the Exchange Act

Section 16(a) of the
Exchange Act requires the Company's directors, officers and stockholders who beneficially own more than 10% of any class of equity
securities of the Company registered pursuant to Section 12 of the Exchange Act, collectively referred to herein as the “Reporting
Persons,” to file initial statements of beneficial ownership of securities and statements of changes in beneficial ownership
of securities with respect to the Company's equity securities with the SEC. All Reporting Persons are required by SEC regulation
to furnish us with copies of all reports that such Reporting Persons file with the SEC pursuant to Section 16(a). Based solely
on our review of the copies of such reports and upon written representations of the Reporting Persons received by us, we believe
that all Section 16(a) filing requirements applicable to such Reporting Persons have been timely met.

Code of Ethics

The Company has adopted
a Code of Ethics for adherence by its Chief Executive Officer and Chief Financial Officer to ensure honest and ethical conduct;
full, fair and proper disclosure of financial information in the Company's periodic reports filed pursuant to the Securities Exchange
Act of 1934; and compliance with applicable laws, rules, and regulations. Any person may obtain a copy of our Code of Ethics, without
charge, by mailing a request to the Company at the address appearing on the front page of this Annual Report on Form 10-K or by
viewing it on our website found at www.myfchs.com.

41

ITEM 11. EXECUTIVE COMPENSATION

The following table
sets forth compensation information for services rendered by certain of our executive officers in all capacities during the last
two completed fiscal years. The following information includes the dollar value of base salaries and certain other compensation,
if any, whether paid or deferred. The executive officers of the company did not receive any stock award, option award, non-equity
incentive plan compensation, or nonqualified deferred compensation earnings during the last two completed years.

Summary Compensation Table

Name and Position(s)

Year

Salary
($)

Bonus
($)

Stock
Awards ($)

Other
($)(1)

Total
Compensation ($)

Christian C. Romandetti(2)

2014

250,000

50,000

300,000

23,076

623,076

President, CEO & Director

2013

240,000

23,750

33,000

36,347

333,097

Donald A. Bittar, CFO,

2014

36,750

150,000

186,750

Secretary, Treasurer & Director

2013

26,500

33,000

59,500

Gary D. Pickett

2014

19,982

19,982

(1)

Consists of provision of an automobile, computer equipment and reimbursement of business expenses.

(2)

As of December 31, 2014, Mr. Romandetti, CEO, deferred
payment of approximately $107,500 of his compensation.

Employment Agreements

The Company entered
a formal five-year employment agreement (the “Employment Agreement”) with Christian “Chris” Romandetti,
dated March 20, 2014 and effective January 1, 2014, to serve as the Company's President and Chief Executive Officer. Pursuant to
the terms and conditions set forth in the Employment Agreement, Mr. Romandetti is entitled to receive an annual base salary of
$250,000, which shall increase no less than 5% per annum for the term of the Employment Agreement. Mr. Romandetti is entitled to
(i) five weeks of vacation per year that if not used in any given one year will accrue and (ii) participate in all benefit plans
the Company provides to its senior executives and the Company will pay 100% of all costs associated with such plans and will reimburse
Mr. Romandetti for all reasonable out-of-pocket expenses and $1,000 per month for auto expenses.

Mr. Romandetti, upon
successfully achieving annual revenue milestones, is entitled to receive a bonus equal to 10% of his salary when $7.1 million in
total annual revenue is reported in a fiscal year scaling up to a bonus equal to 800% of his salary if and when $100 million in
total annual revenue is reported in a fiscal year. If the Company is unable to pay any portion of the bonus compensation when due
because of insufficient liquidity or applicable restrictions under prevailing debt financing agreements, then, as an accommodation
to the Company, Mr. Romandetti shall be able to convert bonus compensation into shares of the Company's common stock at a 30% discount
to the average closing price during the first calendar month after the end of the fiscal year. Mr. Romandetti will also be entitled
to receive a strategic bonus of $100,000, payable in cash, on the sixth month anniversary of opening each new center of excellence.

42

Pursuant to the Company
achieving specific financial performance benchmarks established by the Board of Directors, Mr. Romandetti will also be entitled
to receive a cashless option to purchase up to 1 million shares of common stock per year. The exercise price of the options will
be the fair market value of the average closing price of the stock during the first calendar month after the end of the fiscal
year. Mr. Romandetti shall have up to five years from the date of the annual option grant to exercise the option. In addition to
the above compensation consideration, Mr. Romandetti will be entitled to receive annual restricted stock compensation equal to
100% of the total base salary and bonus compensation. The fair market value of the restricted stock grant shall be determined using
the average closing price of the common stock during the first calendar month after the end of the fiscal year.

Upon the expiration
of the initial five-year term, the Employment Agreement shall automatically be extended for additional terms of one year each unless
either party gives 90 day prior written notice of non-renewal. In addition, Mr. Romandetti's Employment Agreement provides that,
upon Mr. Romandetti's death, disability, termination for any reason other than “Cause” (as such term is defined in
the Employment Agreement) or resignation for “Good Reason” (as such term is defined in the Employment Agreement), the
Company will pay to Mr. Romandetti 12 months of his annual base salary at the time of separation in accordance with the Corporation's
usual payroll practices and in case of disability additionally the payment on a prorated basis of any bonus or other payments earned
in connection with the Company's then-existing bonus plan in place at the time of such termination. Finally, Mr. Romandetti is
subject to standard non-compete and non-solicit covenants during the course of his employment and for a period of 12 months after
the date that he is no longer employed by the Company.

As of December 31, 2014, Mr. Romandetti, CEO, deferred payment of approximately $167,500 of his compensation.

Compensation of Directors

The following table
sets forth the compensation paid our Board of Directors in fiscal 2014:

Name

Shares (#)

Shares ($)

Donald A. Bittar

60,000

$

60,000.00

Colin Halpern1

Christian C. Romandetti

60,000

$

60.000.00

Totals

120,000

$

120,000.00

1
Mr. Halpern resigned as Director of the Company in September 2014.

On December 26, 2014, the Company issued 120,000 shares of its
common stock, valued at $120,000, to its Board of Directors for services rendered.

Outstanding Equity Awards at 2014 Fiscal Year-End

The Company had no
outstanding equity awards as of December 31, 2014.

Potential Payments upon Termination or Change in Control

We do not have any
contract, agreement, plan or arrangement that provides for any payment to any of our Named Executive Officers at, following, or
in connection with a termination of the employment of such Named Executive Officer, a change in control of the Company or a change
in such Named Executive Officer's responsibilities.

The following table
sets forth information as of March 30, 2015 based on information obtained from the persons named below, with respect to the beneficial
ownership of our common and preferred stock by (i) each person (including groups) known to us to be the beneficial owner of more
than five percent (5%) of our common stock, or (ii) each Director and Officer, and (iii) all Directors and Officers of the Company,
as a group. Except as otherwise indicated, all stockholders have sole voting and investment power with respect to the shares listed
as beneficially owned by them, subject to the rights of spouses under applicable community property laws.

Name and
Address of Beneficial Owner

Number of Shares of Common Stock (1)
(2)

Percent of Class

Christian C. Romandetti (3) (6)

6,080,000

32.99

%

Donald A. Bittar (4) (6)

906,666

4.92

%

All Executive Officers and Directors as a Group (2 Individuals)

6,986,666

37.90

%

Hillair Capital Investments L.P. (5) (8)

2,420,000

11.66

%

CT Capital, Ltd (7)

1,038,086

5.33

%

MedTrx Provider Network, LLC (6) (9)

1,875,000

9.23

%

(1)

Except as otherwise indicated, we believe that the beneficial owners of the common stock listed
above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject
to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently
exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person
holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other
person.

(2)

Based on 18,432,055
shares of common stock issued and outstanding as of March 30, 2015.

(3)

Of the reported securities, 5,750,000 shares are owned by Romandetti Family Trust, 120,000
shares are owned by Mr. Romandetti and 210,000 shares are owned by Mr. Romandetti’s wife. Mr. Romandetti disclaims beneficial ownership of
the reported
securities, except to the extent
of his pecuniary interest
therein. Does not include 1,800,000 shares gifted by
Marina Towers Holdings, LLC, a Florida limited liability company, of which Mr. Romandetti serves as managing member, to
recipients including Mr. Romandetti’s son and daughter. Mr. Romandetti disclaims beneficial ownership of the shares
owned by his children neither of whom reside with him.

(4)

Includes 360,000 shares of Common Stock owned by Mr.
Bittar's wife.

(5)

On November 8, 2013, we entered into a Securities Purchase Agreement with Hillair Capital Investments
LP (“Hillair”) whereby we issued and sold to Hillair (i) a $2,320,000, 8% Original Issue Discount Convertible Debenture
due December 28, 2013 (the “Debenture”), subject to extension through November 1, 2015 and convertible into 2,320,000
shares of our common stock, and (ii) a Common Stock Purchase Warrant (the “Warrant”) to purchase up to 2,320,000 shares
of our common stock at an exercise price of $1.35 per share. The Warrants are exercisable on or before November 18, 2018, and may
be exercised on a cashless basis. For purposes of percent ownership calculation, we have assumed that the Warrants were exercised
on a cash basis at an exercise price of $1.35 per share. The Debenture and the Warrants may not be converted if such conversion
would result in Hillair owning in excess of 4.99% of our common stock. Hillair may waive this 4.99% restriction with 61 days’
notice to us. Hillair Capital Management LLC serves as the investment manager of Hillair Capital Investments LP and, as such Hillair
Capital Management LLC has the voting and dispositive power with respect to the securities held to Hillair Capital Investments
LP. As a manager of Hillair Capital Management LLC, each of Sean McAvoy, Scott Kauffman and Neil Kauffman also shares voting and
investment power on behalf of Hillair Capital Investments LP. The address of Hillair Capital Investments LLP is 330 Primrose Road,
Suite 660, Burlingame, California 94010.

44

(6)

c/o 709 S. Harbor City Blvd., Suite 250, Melbourne, Florida
32901.

(7)

On June 13, 2013, we entered into a Loan and Security Agreement (the “Loan Agreement”)
with CT Capital, Ltd, a Florida Limited Partnership. Under the Loan Agreement, CT Capital committed to make an accounts receivable
line of credit to a maximum aggregate amount of $1,500,000. As of March 31, 2015, $1,384,115 was outstanding under the line of
credit. At any time up until December 31, 2016, CT Capital may convert all or any portion of the outstanding principal amount or
interest on the loan into our common stock at a price equal to $0.75 per share. The address of CT Capital, Ltd. Is 6300 NE First
Avenue, Suite 201, Fort Lauderdale, Florida 33334.

(8)

330 Primrose Road, Suite 660, Burlingame, CA 94010. Hillair Capital Management LLC serves as the
investment manager of Hillair Capital Investments LP and, as such, Hillair Capital Management LLC has the voting and dispositive
power with respect to the securities held by Hillair Capital Investments LP. As manager of Hillair Capital Management LLC, each
of Sean McAvoy, Scott Kaufman and Neal Kaufman also shares voting and investment power on behalf of Hillair Capital Investments
LP.

(9)

Comprised of a warrant to purchase 1,875,000 shares of
Common Stock that may be exercised on or prior to the close of business on December 31, 2016 at an exercise price of $3.60 per
share. The address of MedTrx Provider Network, LLC is, 1 Kalisa Way, Suite 201, Paramus, New
Jersey 07652

Equity Compensation Plans

The following table
sets forth information as of December 31, 2014 with respect to compensation plans under which we are authorized to issue shares
of our common stock, aggregated as follows:

•

All compensation plans previously approved by security holders; and

•

All compensation plans not previously approved by security holders.

Equity Compensation Plan Information

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans

(a)

(b)

(c)

Equity compensation plans approved by security holders

0

$

0.00

500,000

Equity compensation plans not approved by security holders

0

$

0.00

0

Total

0

$

0.00

500,000

On March 14, 2012,
we adopted our 2011 Incentive Stock Plan (the “2011 Plan”), pursuant to which 500,000 shares of our common stock are
reserved for issuance as awards to employees, directors, officers, consultants, and other service providers of the Company and
its subsidiaries (an “Optionee”). The term of the 2011 Plan is ten years from January 6, 2012, its effective date.
No grants have been made to date under the 2011 Plan.

Terms and Conditions of Options Pursuant to the 2011 Incentive
Stock Plan

Options granted under
the Plan shall be subject to the following conditions and shall contain such additional terms and conditions, not inconsistent
with the terms of the Plan, as the Plan committee shall deem desirable:

45

•

Option Price. The purchase price of each share of Stock purchasable under an incentive option shall be determined
by the Plan committee at the time of grant, but shall not be less than 100% of the Fair Market Value (as defined below) of such
share of Stock on the date the option is granted; provided , however , that with respect to an Optionee who, at the time such incentive
option is granted, owns (within the meaning of Section 424(d) of the United States Internal Revenue Code of 1986 (the “Code))
more than 10% of the total combined voting power of all classes of stock of the Company or of any subsidiary, the purchase price
per share of Stock shall be at least 110% of the Fair Market Value per share of Stock on the date of grant. The purchase price
of each share of Stock purchasable under a nonqualified option shall not be less than 100% of the Fair Market Value of such share
of Stock on the date the option is granted. The exercise price for each option shall be subject to adjustment as provided in the
Plan. “Fair Market Value” means the fair market value of the Company's issued and outstanding Stock as determined in
good faith by the Plan committee. In no event shall the purchase price of a share of Stock be less than the minimum price permitted
under the rules and policies of any national securities exchange on which the shares of Stock are listed.

•

Option Term. The term of each option shall be fixed by the Plan committee, but no option shall be exercisable
more than ten years after the date such option is granted and in the case of an Incentive Option granted to an Optionee who, at
the time such incentive option is granted, owns (within the meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or of any subsidiary, no such incentive option shall be exercisable more than
five years after the date such incentive option is granted.

•

Exercisability. Options shall be exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Plan committee at the time of grant; provided , however , that in the absence of any option
vesting periods designated by the Plan committee at the time of grant, options shall vest and become exercisable as to one-tenth
of the total number of shares subject to the option on each of the three month anniversary of the date of grant; and provided further
that no options shall be exercisable until such time as any vesting limitation required by Section 16 of the Exchange Act, and
related rules, shall be satisfied if such limitation shall be required for continued validity of the exemption provided under Rule
16b-3(d)(3).

Upon the occurrence
of a “Change in Control” (as hereinafter defined), the Plan committee may accelerate the vesting and exercisability
of outstanding options, in whole or in part, as determined by the Plan committee in its sole discretion. In its sole discretion,
the Plan committee may also determine that, upon the occurrence of a Change in Control, each outstanding option shall terminate
within a specified number of days after notice to an Optionee thereunder, and each such Optionee shall receive, with respect to
each share of Company Stock subject to such option, an amount equal to the excess of the Fair Market Value of such shares immediately
prior to such Change in Control over the exercise price per share of such option; such amount shall be payable in cash, in one
or more kinds of property (including the property, if any, payable in the transaction) or a combination thereof, as the Plan committee
shall determine in its sole discretion.

For purposes of the
Plan, unless otherwise defined in an employment or consulting agreement between the Company and the relevant Optionee, a Change
in Control shall be deemed to have occurred if:

•

a tender offer (or series of related offers) shall be made and consummated for the ownership of 50% or more of the outstanding
voting securities of the Company, unless as a result of such tender offer more than 50% of the outstanding voting securities of
the surviving or resulting corporation shall be owned in the aggregate by the stockholders of the Company (as of the time immediately
prior to the commencement of such offer), any employee benefit plan of the Company or its subsidiaries, and their affiliates;

•

the Company shall be merged or consolidated with another corporation, unless as a result of such merger or consolidation more
than 50% of the outstanding voting securities of the surviving or resulting corporation shall be owned in the aggregate by the
stockholders of the Company (as of the time immediately prior to such transaction), any employee benefit plan of the Company or
its subsidiaries, and their affiliates;

•

the Company shall sell substantially all of its assets to another corporation that is not wholly owned by the Company, unless
as a result of such sale more than 50% of such assets shall be owned in the aggregate by the stockholders of the Company (as of
the time immediately prior to such transaction), any employee benefit plan of the Company or its subsidiaries and their affiliates;
or a Person (as defined below) shall acquire 50% or more of the outstanding voting securities of the Company (whether directly,
indirectly, beneficially or of record), unless as a result of such acquisition more than 50% of the outstanding voting securities
of the surviving or resulting corporation shall be owned in the aggregate by the stockholders of the Company (as of the time immediately
prior to the first acquisition of such securities by such Person), any employee benefit plan of the Company or its subsidiaries,
and their affiliates.

46

Notwithstanding the
foregoing, if Change of Control is defined in an employment or consulting agreement between the Company and the relevant Optionee,
then, with respect to such Optionee, Change of Control shall have the meaning ascribed to it in such employment agreement.

Ownership of voting
securities shall take into account and shall include ownership as determined by applying the provisions of Rule 13d-3(d)(I)(i)
(as in effect on the date hereof) under the Exchange Act. In addition, for such purposes, “Person” shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14 (d) thereof; provided , however , that
a Person shall not include (A) the Company or any of its subsidiaries; (B) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any of its subsidiaries; (C) an underwriter temporarily holding securities pursuant
to an offering of such securities; or (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially
the same proportion as their ownership of stock of the Company.

Description of Securities

First Choice Healthcare
Solutions has 100,000,000 Common Stock, par value $0.001 per share, authorized for issuance and 1,000,000 Preferred Stock, par
value $0.01 per share, authorized for issuance. As of March 30, 2015, there were 18,432,055 shares of Common Stock issued and outstanding.
There were zero (0) shares of Preferred Stock that are issued and outstanding.

On August 12, 2011
Marina Towers, LLC, a Florida limited liability company (“Marina Towers”) an indirect and wholly-owned subsidiary of
Medical Billing Assistance, Inc., a Colorado company (the “Company”) entered into a Loan Agreement (the “Loan
Agreement”) with Guggenheim Life and Annuity Company, a Delaware life insurance company (“Guggenheim”). The closing
and funding of the Loan occurred on August 15, 2011 (the “Closing Date”). Under the Loan Agreement, Guggenheim has
committed to make a loan in the aggregate amount of $7,550,000.00 to Marina Towers with an interest rate of 6.10% per annum (the
“Loan”). The maturity date of the Loan is September 16, 2016 (the “Maturity Date”). The Loan is evidenced
by that certain Consolidated, Amended and Restated Promissory Note, dated August 12, 2011 (the “Note”) and is secured
primarily by: (i) that certain first priority Consolidated, Amended and Restated Mortgage and Security Agreement, dated August
12, 2011, encumbering the real and personal property (the “Property”) of Marina Towers (the “Mortgage”);
and (ii) that certain first priority Assignment of Leases and Rents, dated August 12, 2011, from Marina Towers, as assignor, to
Guggenheim as assignee, pursuant to which Marina Towers assigned to Guggenheim all of Marina Towers' right, title and interest
in and to certain leases and rents as security for the Loan.

The proceeds of the
Loan were used to: (i) repay and discharge existing loans relating to the Property; (ii) pay all past-due basic carrying costs,
if any, with respect to the Property; (iii) make deposits into the reserve funds, or any escrow accounts established pursuant to
the loan documents, on the Closing Date in the amounts set forth in the Loan Agreement; (iv) pay costs and expenses incurred in
connection with the closing of the Loan; (v) fund any working capital requirements of the Property; and (vi) distribute the balance,
if any, to Marina Towers.

Pursuant to the Loan
Agreement, Marina Towers does have the right to prepay the Loan, in whole or in part, prior to the Maturity Date. After the
payment date occurring three months prior to the Maturity Date, Marina Towers may, provided no event of default has occurred and
is continuing, at its option and upon thirty days' prior notice to Guggenheim, prepay the Loan in whole on any date without payment
of any prepayment penalty or premiums.

47

The Loan Agreement
is guaranteed by Christian C. Romandetti, the Company's Chief Executive Officer, pursuant to that certain Guaranty Agreement, dated
August 12, 2011, made by Mr. Romandetti for the benefit of Guggenheim (the “Guaranty”). Pursuant to the non-recourse
Guaranty, Mr. Romandetti agreed to a limited personal guarantee to Guggenheim of the payments and performance of the obligations
of and liabilities of Marina Towers pursuant to the Loan Agreement.

On February 1, 2012,
the Company opened a $500,000 unsecured, revolving line of credit loan with CCR of Melbourne, Inc., an entity jointly owned and
controlled at that time by Christian “Chris” Romandetti, the Company's Chief Executive Officer and Carmen Charles Romandetti,
our CEO's father. The revolving line of credit loan was to mature on October 1, 2015 with interest at a per annum rate of 8.5%
beginning March 1, 2012. Advances on the line of credit were at the sole discretion of CCR of Melbourne, Inc. On November 8, 2013,
CCR converted the then outstanding balance of $142,483.52, representing all of the outstanding related party principal and interest
amount on the loan, into shares of the Company's common stock at a price equal to $0.45 per share for a total of 316,631 shares
issued. On November 8, 2013, Chris Romandetti relinquished all rights, title to and ownership in CCR to Carmen Romandetti in consideration
of a personal loan made to Chris Romandetti by Carmen Romandetti.

The Company entered
into an unsecured loan agreement with HS Real Company, LLC (“HSR”) on May 17, 2012 for $100,000 at an interest rate
of 12% per annum (the “HSR Note”). On August 5, 2012, HSR increased the principal amount to $250,000, and subsequently
HSR advanced an additional $50,000 to the Company, bringing the aggregate principal amount of the HSR Note to $300,000, all of
which was due and payable to HSR on December 31, 2012. The Company paid $27,556 and $17,053 as interest on the HSR note for the
years ended December 31, 2013 and 2012, respectively. Mr. Colin Halpern is both an affiliate of HSR and a member of the Company's
Board of Directors. On November 8, 2013, the Company paid off the HSR Note, remitting HSR $300,000 for the outstanding principal
and interest balance due on the HSR Note.

On September 7, 2013,
the Company acquired a patent, US 7,789,842 B2, for an orthopedic adjustable arm sling from Donald A. Bittar, the inventor and
the Company's Chief Financial Officer. Based on the independent, third party evaluation of Professional Business Brokers, Inc.,
the patent was valued at $286,500. The Company issued Mr. Bittar 636,666 shares of its common stock, valued at $286,500, or $0.45
per share, which was estimated to approximate fair value of the patent acquired and did not materially differ from the fair value
of the common stock at the time of issuance.

Director Independence

Currently, none of
our directors qualify as independent directors under the NASDAQ listing standards and Rule 10A3 and Rule 10C-1 of the Exchange
Act.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

Our independent auditor,
RBSM LLP, billed an aggregate of $53,000 for the year ended December 31, 2014 audit and the quarterly reviews for the year ended
December 31, 2014. RBSM LLP billed $48,000 for the December 31, 2013 audit, quarterly reviews for the year ended December 31, 2013
and audit related fees. In addition, $6,000 and $6,000 was billed for tax services in 2014 and 2013, respectively. Audit Fees and
Audit Related Fees consist of fees billed for professional services rendered for auditing our Financial Statements, reviews of
interim Financial Statements included in quarterly reports, services performed in connection with other filings with the Securities
& Exchange Commission and related comfort letters and other services that are normally provided by our independent auditors
in connection with statutory and regulatory filings or engagements. Tax Fees consists of fees billed for professional services
for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and local tax compliance
and consultation in connection with various transactions and acquisitions.

2014

2013

Audit Fees

$

53,000

$

48,000

Audit-Related Fees

—

Tax Fees

6,000

6,000

All Other Fees

—

Total

$

59,000

$

54,000

48

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibit No.

Description

3.1

Articles of Incorporation of Medical Billing Assistance, Inc. (the “Company”) (incorporated by reference to the Company's Form SB-2 Registration Statement as filed December 20, 2007)

3.1(a)

Certificate of Incorporation of First Choice Healthcare Solutions, Inc. (incorporated by reference to Annex B to the Company's Information Statement on Schedule 14C, filed with the SEC on March 14, 2012)

3.1(b)

Certificate of Merger between First Choice Healthcare Solutions, Inc., a Delaware and surviving corporation and Medical Billing Assistance, Inc., a Colorado corporation. (incorporated by reference to Exhibit 3.1(B) to the Company's Current Report on Form 8-K, filed with the SEC on April 9, 2012)

3.2

By-laws of the Company (incorporated by reference to the Company's Form SB-2 Registration Statement as filed December 20, 2007)

3.2(a)

By-laws of First Choice Healthcare Solutions, Inc. (incorporated by reference to Annex C to the Company's Information Statement on Schedule 14C, filed with the SEC on March 14, 2012)

4.1

Medical Billing Assistance, Inc. 2011 Incentive Stock Plan (incorporated by reference to Annex E to the Company's Information Statement on Schedule 14C, filed with the SEC on March 14, 2012)

10.1

Share Exchange Agreement, dated December 29, 2010, by and between the Company, FCID Medical, Inc., and FCID Holdings, Inc. (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on January 3, 2011)

10.5

Loan Agreement, dated as of August 12, 2011, between Marina Towers, LLC (“Marina”) and Guggenheim Life and Annuity Company (“Guggenheim”) (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on August 22, 2011)

10.6

Florida Consolidated, Amended and Restated Promissory Note, dated August 12, 2011, made by Marina to Guggenheim (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on August 22, 2011)

10.7

Guaranty Agreement, dated as of August 12, 2011, made by Christian C. Romandetti for the benefit of Guggenheim (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed with the SEC on August 22, 2011)

10.8

Common Stock Warrant, issued December 23, 2011, to MedTrx Provider Network, LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on February 13, 2012)

10.9

Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on February 13, 2012)

10.10

Agreement and Plan of Merger, made as of February 13, 2012, by and between the Company and First Choice Healthcare Solutions, Inc. (incorporated by reference to Appendix A to the Company's Information Statement on Schedule 14C, filed with the SEC on March 14, 2012)

10.11

Membership Interest Purchase Closing Agreement between Seller, FCID Medical, Inc. and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on April 9, 2012)

10.12

Management Services Agreement between FCID Medical, Inc. and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on April 9, 2012)

10.13

Loan Agreement, dated February 1, 2012, between FCID of Medical, Inc. and CCR of Melbourne, Inc. (incorporated by reference to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q, filed with the SEC on May 15, 2012)

49

Exhibit No.

Description

10.14

Revolving Line of Credit Promissory Note, dated February 15, 2012, in the amount of $500,000, issued by FCID Medical, Inc. to CCR of Melbourne, Inc. (incorporated by reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q, filed with the SEC on May 15, 2012)

10.15

Promissory Note, dated as of May 18, 2012, made by First Choice Medical Group of Brevard, LLC to the order of General Electric Capital Corporation, in the amount of $450,000 (incorporated by reference to Exhibit 10.14 to the Company's Current Report on Form 8-K, filed with the SEC on May 25, 2012)

10.16

Master Lease Agreement, dated as of May 10, 2012, between First Choice Medical Group of Brevard, LLC and General Electric Capital Corporation, with schedules (incorporated by reference to Exhibit 10.15 to the Company's Current Report on Form 8-K, filed with the SEC on May 25, 2012)

10.16(a)

Guaranty, dated May 10, 2012, by Christian Romandetti to General Electric Capital Corporation (incorporated by reference to Exhibit 10.16 to the Company's Current Report on Form 8-K, filed with the SEC on May 25, 2012)

10.16(b)

Guaranty, dated May 10, 2012, by First Choice Healthcare Solutions, Inc. to General Electric Capital Corporation (incorporated by reference to Exhibit 10.17 to the Company's Current Report on Form 8-K, filed with the SEC on May 25, 2012)

10.17

Securities Purchase Agreement, made as of December 14, 2012, with note as an exhibit thereto, for the sale of an 8% convertible note in the principal amount of $203,500 (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.18

Securities Purchase Agreement, made as of February 19, 2013, with note as an exhibit thereto, for the sale of an 8% convertible note in the principal amount of $103,500 (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.19

Securities Purchase Agreement, made as of August 14, 2013, for the sale of an 8% convertible note in the principal amount of $153,500, with note as an exhibit thereto(incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.20

Agreement, dated as of May 1, 2013, between MTI Capital LLC and First Choice Healthcare Solutions, Inc. (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.21

Loan and Security Agreement, dated as of June 13, 2013, by and between CT Capital Ltd and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.21(a)

Agreement to Modify Loan Interest Rate and Consent to FCHS Secured Debt Issuance, dated June 13, 2013, by and between CT Capital Ltd and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.21(a) to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.22

Form of Membership Interest Purchase Agreement, dated August 28, 2013, by and between the Company and the sellers of the membership interests in MedTech Diagnostics LLC (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.23

License Agreement, dater August 28, 2013, by and between Donald Bittar and First Choice Healthcare Solutions, Inc. (incorporated by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.24

Amendment to Loan Agreement, dated as of August 28, 2013, by and among MTI Capital LLC and First Choice Healthcare Solutions, Inc. (incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.25

Form of Securities Purchase Agreement, dated as of November 8, 2013, between the Company and Hillair Capital Investments, L.P. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on November 14, 2013)

10.26

Form of Common Stock Purchase Warrant, dated as of November 8, 2013, issued to Hillair Capital Investments, L.P. (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed with the SEC on November 14, 2013)

50

Exhibit No.

Description

10.27

Form of Debenture, dated as of November 8, 2013 issued to Hillair Capital Investments, L.P. (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed with the SEC on November 14, 2013)

10.28

Form of Security Agreement, dated as of November 8, 2013 between Hillair Capital Investments, L.P., the Company and certain of its subsidiaries (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on November 14, 2013)

10.28(a)

Form of Subsidiary Guarantee, dated as of November 8, 2013, to the Securities Purchase Agreement, dated as of November 8, 2013, between the Company and Hillair Capital Investments, L.P. (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed with the SEC on November 14, 2013)

10.29

Loan Agreement, dated May 17, 2012 between HS Real Company, LLC and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.29(a)

Promissory Note, dated May 17, 2012, to HS Real Company, LLC (incorporated by reference to Exhibit 10.29(a) to the Company's Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.29(b)

Amendment to Loan Agreement dated August 5, 2012, with HS Real Company LLC, and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.29(b) to the Company's Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.30

Employment Agreement, dated March 20, 2014, between the Company and Christian Charles Romandetti (incorporated by reference to Exhibit 10.30 to the Company's Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

14

Code of Ethics, (incorporated by reference to Exhibit 14 to the Company's Annual Report on Form 10-K, filed with the SEC on March 30, 2012)

21.1

List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

31.1

Certification of CEO pursuant to Sec. 302+

31.2

Certification of CFO pursuant to Sec. 302+

32.1

Certification of CEO pursuant to Sec. 906+

32.2

Certification of CFO pursuant to Sec. 906+

EX-101.INS

XBRL INSTANCE DOCUMENT+

EX-101.SCH

XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT+

EX-101.CAL

XBRL TAXONOMY EXTENSION CALCULATION LINKBASE+

EX-101.DEF

XBRL TAXONOMY EXTENSION DEFINITION LINKBASE+

EX-101.LAB

XBRL TAXONOMY EXTENSION LABELS LINKBASE+

EX-101.PRE

XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE+

+filed herewith

51

SIGNATURES

In accordance with Section 13 or 15(d)
of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

We have audited the accompanying balance sheets of
First Choice Healthcare Solutions, Inc. (the “Company”), as of December 31, 2014 and 2013, and the related statements
of operations, stockholders' deficit and cash flows for each of the two years in the period ended December 31, 2014. These financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements
based on our audits.

We have conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The
Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of First Choice Healthcare Solutions, Inc. as of December
31, 2014 and 2013, and the results of its operations and its cash flows for each of the two years in the period ended December
31, 2014, in conformity with accounting principles generally accepted in the United States of America.

/s/ RBSM LLP

New York, New York

April 14, 2015

F-2

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2014 AND 2013

2014

2013

ASSETS

Current assets

Cash

$

279,087

$

739,158

Cash-restricted

318,259

256,246

Accounts receivable, net

1,804,636

1,272,155

Prepaid and other current assets

153,296

140,580

Capitalized financing costs, current portion

68,370

57,348

Total current assets

2,623,648

2,465,487

Property, plant and equipment, net of accumulated depreciation of $2,472,111 and $1,959,127

See the accompanying notes to these consolidated
financial statements.

F-7

NOTE 1— ORGANIZATION, BUSINESS AND PRINCIPLES OF CONSOLIDATION

A summary of the significant accounting
policies applied in the presentation of the accompanying consolidated financial statements follows:

Basis and business presentation

First Choice Healthcare Solutions, Inc.,
a Delaware corporation (the “Company” or “FCHS”) filed a certificate of merger (the
“Certificate of Merger”) of Medical Billing Assistance, Inc., a Colorado corporation incorporated on May 30, 2007 (“Medical
Billing”), into the Company. The effective date for the Certificate of Merger was April 4, 2012. Pursuant to the Certificate
of Merger, Medical Billing was merged with and into the Company. The effect of the merger was that Medical Billing reincorporated
from Colorado to Delaware (the “Reincorporation”). The Company is deemed to be the successor issuer of Medical Billing
under Rule 12g-3 of the Securities Exchange Act of 1934, as amended.

Contemporaneously with the Reincorporation,
the Company changed its name to First Choice Healthcare Solutions, Inc. to more closely align the company's name with its target
market. Otherwise, the reincorporation does not result in any change in the business, management, fiscal year, accounting, and
location of the principal executive offices, assets or liabilities of the Company, formerly known as Medical Billing Assistance,
Inc.

The consolidated financial statements include
the accounts of the Company, including FCID Holdings, Inc., FCID Medical, Inc., First Choice Medical Group of Brevard, LLC and
Marina Towers, LLC which are all wholly-owned subsidiaries of FCHS. All significant intercompany balances and transactions have
been eliminated in consolidation.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the financial statements
in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant estimates include
the recoverability and useful lives of long-lived assets, the fair value of the Company’s stock, and stock-based compensation.
Actual results may differ from these estimates.

Revenue Recognition

The Company recognizes revenue in accordance
with Accounting Standards Codification subtopic 605-10, “Revenue Recognition” (“ASC 605-10”) which
requires that four basic criteria be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2)
delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Determination
of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered
and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are recorded.

ASC 605-10 incorporates Accounting Standards
Codification subtopic 605-25, “Multiple-Element Arrangements” (“ASC 605-25”). ASC 605-25 addresses
accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets.
The effect of implementing ASC 605-25 on the Company's financial position and results of operations was not significant.

The Company recognizes in accordance with
Accounting Standards Codification subtopic 954-310, “Health Care Entities” (“ASC 954-310”), significant
patient service revenue at the time the services are rendered, even though it does not assess the patient’s ability to pay.
Therefore, The Company’s interim and annual periods reports disclose both, its policy for assessing and disclosing the timing
and amount of uncollectable patient service revenue recognized as doubtful. Qualitative and quantitative information about significant
changes in the allowance for doubtful accounts related to patient accounts receivable are disclosed in the Company’s reports.
These estimates are based upon the past history and identified trends for each of our payers.

F-8

Patient Service Revenue

The Company recognizes patient service
revenue associated with services provided to patients who have third-party payer coverage on the basis of contractual rates for
the services provided. For uninsured or self-pay patients that do not qualify for charity care, the Company recognizes revenue
on the basis of its standard rates for services provided (or on the basis of discounted rates, if negotiated or provided by policy). On
the basis of historical experience, a portion of the Company’s patient service revenue may be potentially uncollectible due
to patients who are unable or unwilling to pay for the services provided or the portion of their bill for which they are responsible.
Thus, the Company records a provision for bad debts related to potentially uncollectible patient service revenue in the period
the services are provided.

Rental Revenue

FCID Holdings, Inc. has one real estate
holding, Marina Towers, LLC, a 78,000 square foot, Class A, six-story building located on the Indian River in Melbourne, Florida.
In addition to housing our corporate headquarters and First Choice-Brevard, the building, which averages 95% annual occupancy,
also leases approximately 48,698 square feet of commercial office space to third party tenants. The Company recognizes rental revenue
associated with the period of time facility is leased at the contractual lease rates (or on the basis of discounted rates, if negotiated).

Cash

Cash consist of cash held in bank demand
deposits. The Company considers all highly liquid instruments with original maturities of three months or less to be cash
equivalents. As of December 31, 2014, the Company had $279,087 cash.

Concentrations of Credit Risk

The Company’s financial instruments
that are exposed to a concentration of credit risk are cash and accounts receivable. Occasionally, the Company’s
cash and cash equivalents in interest-bearing accounts may exceed FDIC insurance limits. The financial stability of these institutions
is periodically reviewed by senior management.

Accounts Receivable

Accounts receivables are carried at their
estimated collectible amounts net of doubtful accounts. The Company analyzes its past history and identifies trends for each major
payer sources of revenue to estimate the appropriate allowance for doubtful accounts and provision for bad debts. Management regularly
reviews data about these major payer sources of revenue in evaluating the sufficiency of the allowance for doubtful accounts.

·

Rental receivables. Accounts receivables from rental activities are periodically evaluated for
collectability in determining the appropriate allowance for doubtful account provision for bad debts and provision of bad debts.

·

Patient receivables. Accounts receivables from services provided to patients who have third-party
coverage, the Company analyzes contractually due amounts and provides a provision for bad debts, if necessary. The Company
records a provision for bad debts in the period of service on the basis of past experience or when indications are the patients
are unable or unwilling to pay the portion of their bill for which they are responsible. The difference between the standard
rates (or the discounted rates if negotiated) and the amounts actually collected after all reasonable collection efforts have been
exhausted, is charged off against the allowance for doubtful accounts.

As of December 31, 2014 and 2013, the Company’s
allowance for bad debts was $1,482,212 and $361,284, respectively.

Capitalized financing costs

Capitalized financing costs represent costs
incurred in connection with obtaining the debt financing. These costs are amortized ratably and charged to financing expenses over
the term of the related debt. The amortization for the years ended December 31, 2014 and 2013 was $82,743 and $57,348 respectively.
Accumulated amortization of deferred financing costs were $231,369 and $148,626 at December 31, 2014 and 2013, respectively.

F-9

Segment Information

Accounting Standards Codification subtopic
“Segment Reporting” 280-10 (“ASC 280-10”) establishes standards for reporting information regarding
operating segments in annual financial statements and requires selected information for those segments to be presented in interim
financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services
and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial
information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how
to allocate resources and assess performance. The information disclosed herein represents all of the material financial information
related to the Company’s two principal operating segments (see Note 16 – Segment Information).

Patient List

Patient list is comprised of acquired patients
in connection with the acquisition of First Choice - Brevard and is amortized ratably over the estimated useful life of 15 years.
Amortization expenses for the years ended December 31, 2014 and 2013 was $20,000 and $20,000, respectively. Accumulated amortization
of patient list costs were $55,000 and $35,000 at December 31, 2014 and 2013, respectively.

Long-Lived Assets

The Company follows FASB ASC 360-10-15-3,
“Impairment or Disposal of Long-lived Assets,” which established a “primary asset” approach to determine
the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset
to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable
if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived
assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

At December 31, 2013, the Company's management
performed an evaluation of its investment in MedTech for purposes of determining the implied fair value of the asset at December
31, 2013. The test indicated that the recorded remaining book value of its investment exceeded its fair value for the year ended
December 31, 2013. As a result, upon completion of the assessment, management recorded a non-cash impairment charge of $450,000,
net of tax, or $0.03 per share during the year ended December 31, 2013 to reduce the carrying value of the investment to $0. Considerable
management judgment is necessary to estimate the fair value. Accordingly, actual results could vary significantly from management's
estimates. (see Note 6 to Notes to the Consolidated Financial Statements).

Property and equipment are stated at cost.
When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts
and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes, property
and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives of 20 to 39
years.

Net Loss Per Share

The Company accounts for net loss per share in accordance with
Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”), which requires presentation of
basic and diluted earnings per share (“EPS”) on the face of the statement of operations for all entities with complex
capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator
and denominator of the diluted EPS.

Basic net loss per share is computed by
dividing net loss by the weighted average number of shares of common stock outstanding during each period. It excludes the dilutive
effects of potentially issuable common shares such as those related to our issued convertible debt, warrants and stock options.
Diluted net loss per share for years ending December 31, 2014 and 2013 does not reflect the effects of 3,751,502 and 3,414,070
shares, respectively, potentially issuable upon the conversion of our convertible note payable or the exercise of the Company's
stock options and warrants (calculated using the treasury stock method) as of December 31, 2014 and 2013 as including such would
be anti-dilutive.

F-10

Stock-Based Compensation

Share-based compensation issued to employees
is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service
period. The Company measures the fair value of the share-based compensation issued to non-employees using the stock price observed
in the arms-length private placement transaction nearest the measurement date (for stock transactions) or the fair value of the
award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value
of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for performance by the
counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. As
of December 31, 2014, the Company had no non-employee options outstanding to purchase shares of common stock.

Derivative Instrument Liability

The Company accounts for derivative instruments
in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities,
including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives
on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the
derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated
are based on the exposures hedged. At December 31, 2014 and 2013, the Company did not have any derivative instruments that were
designated as hedges.

Fair Value

Accounting Standards Codification subtopic
825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments.
ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities
required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it
would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent
risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity
to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes
three levels of inputs that may be used to measure fair value:

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices
in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all
significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially
the full term of the assets or liabilities.

·

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets
or liabilities.

To the extent that valuation is based on models or inputs that
are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the
inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes,
the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest
level input that is significant to the fair value measurement.

The carrying value of the Company’s cash, accounts receivable,
accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate
fair value because of their short-term maturity.

As of December 31, 2014 and 2013, the Company
did not have any items that would be classified as level 1, 2 or 3 disclosures.

Patents

Intangible assets with finite lives are
amortized over their estimated useful lives. Intangible assets with indefinite lives are not amortized, but are tested for impairment
annually. The Company's intangible assets with finite lives are patent costs, which are amortized over their economic or legal
life, whichever is shorter. These patent costs were acquired on September 7, 2013 by the issuance of 636,666 shares of the Company's
common stock to a related party (See Note 13 to Notes to the Consolidated Financial Statements). The shares of common stock were
valued at $286,500, which was estimated to be approximately the fair value of the patent acquired and did not materially differ
from the fair value of the common stock. Amortization expenses for the years ended December 31, 2014 and 2013 was $19,100 and $-0-,
respectively. Accumulated amortization of Patent costs were $19,100 and $-0- at December 31, 2014 and 2013, respectively.

F-11

Income Taxes

The Company recognizes deferred tax assets
and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements
or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets
and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in
effect for the years in which the temporary differences are expected to reverse.

The Company adopted the provisions of Accounting
Standards Codification (“ASC”) Topic 740-10, which prescribes a recognition threshold and measurement process for financial
statements recognition and measurement of a tax position taken or expected to be taken in a tax return.

Management has evaluated and concluded
that there were no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements
as of December 31, 2014 and 2013. The Company does not expect any significant changes in its unrecognized tax benefits within twelve
months of the reporting date.

The Company’s policy is to classify
assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the consolidated
statements of operations.

Recent Accounting Pronouncements

The FASB has issued ASU No. 2014-12, Compensation – Stock
Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could
Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting, and that
could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should
not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should
be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the
compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this
ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier
adoption is permitted. The Company has not yet determined the effect of the adoption of this standard and it is expected to have
a material impact on the Company’s consolidated financial statements.

The FASB has
issued ASU No. 2014-09, Revenue from Contracts with Customers. This ASU supersedes the revenue recognition requirements
in Accounting Standards Codification 605 - Revenue Recognition and most industry-specific guidance throughout the Codification.
The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This
ASU is effective on January 1, 2017 and should be applied retrospectively to each prior reporting period presented or retrospectively
with the cumulative effect of initially applying the ASU recognized at the date of initial application. The Company has not yet
determined the effect of the adoption of this standard and it is expected to have an immaterial impact on the Company’s consolidated
financial statements.

In August, 2014,
the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties
About an Entities Ability to Continue as a Going Concern. The standard is intended to define management’s responsibility
to decide whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide
related footnote disclosures. The standard requires management to decide whether there are conditions or events that raise substantial
doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements
are issued. The standard provides guidance to an organization’s management, with principles and definitions that are intended
to reduce diversity in the timing and content of disclosures that are commonly provided by organizations in the footnotes. The
standard becomes effective in the annual period ending after December 15, 2016, with early application permitted. The adoption
of this pronouncement is not expected to have a material impact on the consolidated financial statements.

There are other various updates recently
issued, most of which represented technical corrections to the accounting literature or application to specific industries and
are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

F-12

Subsequent Events

The Company evaluates events that have
occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did
not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated
financial statements, except as disclosed.

NOTE 3 — LIQUIDITY

The Company incurred various non-recurring
expenses in 2014 in connection with the planned development of its medical practice. Management believes the continuing trend
of positive growth before interest, taxes, depreciation and amortization into 2015 will support improved liquidity. In the fourth
quarter of 2013, the Company paid off or converted to equity a total of $1,238,480 in outstanding debt. Currently, the Company
has three main sources of liquidity, its line of credit with CT Capital, LP, revenue received from FCID Medical, Inc. and revenue
received from its real estate interest, FCID Holdings, Inc.

On June 13, 2013, the Company’s subsidiary,
First Choice – Brevard entered into a loan and security agreement with CT Capital, Ltd., d/b/a CT Capital, LP, a Florida
limited liability partnership for an accounts receivable line of credit in the maximum aggregate amount of $1,500,000. Under the
line of credit with CT Capital, the Company reduced the annual interest rate from 12% per annum to 6% per annum in exchange for
the issuance to CT Capital of 100,000 restricted shares of the Company’s common stock. As of December 31, 2014, the Company
has used $1,237,000 of the amount available under the line of credit.

The Company’s wholly owned subsidiary,
FCID Holdings, Inc. (“FCID Holdings”) operates its real estate interests. Currently, FCID Holdings has one real estate
holding, Marina Towers, LLC, a 78,000 square foot, Class A, six-story building located on the Indian River in Melbourne, Florida.
In addition to housing the Company’s corporate headquarters and First Choice – Brevard, the building, which averages
95% annual occupancy, also leases approximately 48,698 square feet of commercial office space to third party tenants.

The Company believes that ongoing operations
of Marina Towers, LLC and the current positive cash balance along with continued execution of its business development
plan will allow the Company to further improve its working capital and currently anticipates that it will have sufficient capital
resources to meet projected cash flow requirements through the date that is one year and one day from the filing of this report
.. However, in order to execute the Company’s business development plan, which there can be no assurance it will
do, the Company may need to raise additional funds through public or private equity offerings, debt financings, corporate collaborations
or other means and potentially reduce operating expenditures. If the Company is unable to secure additional capital, it may be
required to curtail its business development initiatives and take additional measures to reduce costs in order to conserve its
cash.

NOTE 4 — CASH – RESTRICTED

Cash-restricted is comprised of funds deposited
to and held by the mortgage lender for payments of property taxes, insurance, replacements and major repairs of the Company's commercial
building. The majority of the restricted funds are reserved for tenant improvements. As of December 31, 2014 the Company had $318,259
in restricted cash as compared to $256,246 at December 31, 2013.

NOTE 5 — PROPERTY, PLANT, AND
EQUIPMENT

Property, plant and equipment at December 31, 2014 and 2013
are as follows:

2014

2013

Land

$

1,000,000

$

1,000,000

Building

3,055,168

3,055,168

Building improvements

3,970,603

3,953,846

Automobiles

29,849

29,849

Computer equipment

327,847

210,698

Medical equipment

2,253,219

2,238,639

Office equipment

129,723

132,984

10,766,409

10,621,184

Less: accumulated depreciation

(2,472,111

)

(1,959,127

)

$

8,294,298

$

8,662,057

During the year ended December 31, 2014
and 2013, depreciation expense charged to operations was $512,984 and $483,797, respectively.

F-13

NOTE 6 — INVESTMENTS

On September 7, 2013, the Company acquired
an aggregate 10% membership interest in MedTech Diagnostics, LLC, a Florida distributor of multi-test medical diagnostic equipment.
The investment is recorded at an aggregate cost of $450,000, which was determined at the date of the acquisition, and based on
the fair value of the underlying issued common shares, or $0.45 per share. More specifically, the Company acquired a 3.75% membership
interest for 375,000 shares of its common stock valued at the date of the acquisition of $168,750; and a 6.25% membership interest
valued at the date of the acquisition of $281,250. At December 31, 2013, the Company's management performed an evaluation of its
investment in MedTech for purposes of determining the implied fair value of the asset at December 31, 2013. The test indicated
that the recorded remaining book value of its investment exceeded its fair value for the year ended December 31, 2013. As a result,
upon completion of the assessment, management recorded a non-cash impairment charge of $450,000, net of tax, or $0.03 per share
during the year ended December 31, 2013 to reduce the carrying value of the investment to $0. Considerable management judgment
is necessary to estimate the fair value. Accordingly, actual results could vary significantly from management's estimates.

NOTE 7 — ADVANCES

During the year ended December 31, 2014,
the Company received an aggregate of $224,000 as cash advances from non-related parties. The advances are due upon demand with
an interest rate of 12% per annum.

NOTE 8 — LINES OF CREDIT

Line of Credit, CT Capital

On June 13, 2013, the Company's subsidiary,
First Choice Medical Group of Brevard, LLC, entered into a Loan and Security Agreement (the “Loan Agreement”) with
CT Capital. Ltd., d/b/a CT Capital, LP, a Florida limited liability partnership (the “Lender”). Under the Loan Agreement,
the Lender committed to make an accounts receivable line of credit in the maximum aggregate amount of $1,500,000 to First Choice
Medical Group of Brevard, LLC with an interest rate of 12% per annum (the “Loan”). The maturity date of the Loan is
December 31, 2016 (the “Maturity Date”). Interest shall be due and payable monthly. Upon default, the interest may
be adjusted to the highest rate permissible by law. The Loan is secured by the accounts receivable, and assets of the Company's
subsidiary, First Choice Medical Group of Brevard, LLC. The assets constitute the collateral for the repayment of the Loan. The
Loan Agreement also includes covenants, representations, warranties, indemnities and events of default that are customary for facilities
of this type. The advance rate is defined as: 80% of all receivables to be 120 days or less at the net collection rate of approximately
27% of total billings, excluding patient billings and collections. Additionally, allowable accounts receivable will also include
50% of all accounts receivable protected by Legal Letters of Protection. At any time, the Lender may convert all or any portion
of the outstanding principal amount or interest on the Loan into the common stock of the Company at a price equal to $0.75 per
share. The Company did not record an embedded beneficial conversion feature in the note since the fair value of the common stock
did not exceed the conversion rate at the date of commitment.

On November 8, 2013, in consideration for
a fee of 100,000 shares of the Company's common stock, restricted pursuant to Rule 144, CT Capital agreed to modify the line of
credit to the Company's subsidiary, First Choice Medical Group of Brevard, LLC. Under the loan modification agreement, the annual
rate of interest was reduced from 12% per annum to 6% per annum and will remain at 6% until November 1, 2015. All other terms under
the June 13, 2013 Loan and Security Agreement will remain the same.

The obligations of the Company under the
Loan Agreement are guaranteed by certain affiliates of the Company, including a personal guarantee issued by the Company's Chief
Executive Officer.

During the year ended December 31, 2014,
the Company issued 200,000 shares of its common stock upon the election by Lender to convert $150,000 of outstanding principal
amount under the line of credit.

F-14

Line of Credit, MTI Capital

On May 1, 2013, the Company entered into
a loan commitment whereby MTI Capital LLC provided a line of credit up to $2,000,000 in the form of a convertible loan with interest
at 12% per annum, payable monthly with principal due two years from the effective date of the loan. On August 28, 2013, the Company
amended the loan agreement to change the conversion rate from $0.75 per share to $0.45 per share.

In the third quarter 2013, the Company
did not record an embedded beneficial conversion feature in the note since the fair value of the common stock did not exceed the
conversion rate at the date of commitment or amendment.

On November 8, 2013, MTI converted the
then outstanding balance of $624,000 principal and interest amount on the loan, into shares of the Company's common stock at a
price equal to $0.45 per share for a total of 1,386,667 shares issued.

NOTE 9 - LINE OF CREDIT, RELATED PARTY

On February 1, 2012, the Company opened
a $500,000 unsecured, revolving line of credit loan with CCR of Melbourne, Inc. (“CCR”), an entity jointly owned and
controlled at that time by the Company's Chief Executive Officer and Carmen Romandetti, the Chief Executive Officer's father. The
revolving line of credit loan was to mature on October 1, 2015 with interest at a per annum rate of 8.5% beginning March 1, 2012.
Advances on the line of credit were at the sole discretion of CCR of Melbourne, Inc. The Company accrued $11,153 as related party
interest for the year ended December 31, 2013.

On November 8, 2013, CCR converted the
then outstanding balance of $142,483, representing all of the outstanding related party principal and interest amount on the loan,
into shares of the Company's common stock at a price equal to $0.45 per share for a total of 316,631 shares issued.

On November 8, 2013, the Chief Executive
Officer relinquished all rights, title to and ownership in CCR to Carmen Romandetti in consideration of a personal loan made to
the Chief Executive Officer by Carmen Romandetti.

NOTE 10 - NOTE PAYABLE, RELATED PARTY

The Company entered into an unsecured loan
agreement with HS Real Company, LLC (“HSR”) on May 17, 2012 for $100,000 at an interest rate of 12% per annum (the
“HSR Note”). On August 5, 2012, HSR increased the principal amount to $250,000, and subsequently HSR advanced an additional
$50,000 to the Company, bringing the aggregate principal amount of the HSR Note to $300,000, all of which was due and payable to
HSR on December 31, 2013. The Company paid $27,556 as interest on the HSR note for the year ended December 31, 2013.

On November 8, 2013, the Company paid off
the HSR Note in full, remitting HSR $300,000 for the outstanding principal and interest balance due on the HSR Note.

NOTE 11 - CONVERTIBLE NOTES PAYABLE

Hillair Capital Investments, L.P.

On November 8, 2013, the Company entered
into a securities purchase agreement (the “Securities Purchase Agreement”) with Hillair Capital Investments L.P. ("Hillair")
in exchange for the issuance of (i) a $2,320,000, 8% original issue discount convertible debenture, which was originally due on
December 28, 2013 and subsequently extended on December 28, 2013 through November 1, 2015 (the “Debenture”), and (ii)
a common stock purchase warrant (the “Warrant”) to purchase up to 2,320,000 shares of the Company’s common stock
at an exercise price of $1.35 per share, which may be exercised on a cashless basis, until November 8, 2018. The Debenture and
the Warrant may not be converted if such conversion would result in Hillair beneficially owning in excess of 4.99% of the Company’s
common stock. Hillair may waive this 4.99% restriction with 61 days’ notice to the Company.

The Company issued to Hillair the Debenture
with the Warrant for the net purchase price of $2,000,000 (reflecting the $320,000 original issue discount of the Debenture). Until
the Debenture is no longer outstanding, the Debenture is convertible, in whole or in part at the option of Hillair, into shares
of common stock, subject to certain conversion limitations set forth above. The Company, however, has reserved the right to pay
the Debenture in cash. The conversion price for the Debenture is $1.00 per share, subject to adjustment for stock splits, stock
dividends, and sales of securities for less than $1.00 per share or other distributions by the Company. As a result of the Company
achieving certain milestones set forth in the Securities Purchase Agreement, however, the conversion price of the Debenture will
not be reduced to less than $1.00 per share as a result of any subsequent sales of securities for less than $1.00 per share of
common stock.

F-15

The Company will be obligated to redeem
$580,000 of principal on April 1, 2015 (see Note 20-Subsequent Events), May 1, 2015, August 1, 2015 and November 1, 2015, plus
accrued but unpaid interest and any other amounts that may be owed to the holder of the Debenture on those dates. Interest on the
Debenture accrues at the rate of 8% annually and is payable quarterly on August 1, November 1, February 1, and May 1, beginning
on August 1, 2014. Interest is payable in cash or at the Company’s option in shares of the Company’s common stock,
provided certain conditions are met. The August 1st and November 1st 2014 payments have been made.

On or after May 8, 2014, subject to certain
conditions set forth in the Debenture, the Company may elect to prepay any portion of the principal amount of the Debenture, subject
to providing advance notice to the holder of the Debenture, at 120% of the then outstanding principal amount of the Debenture,
plus accrued but unpaid interest and any other amounts then owed to the holder of the Debenture as further set forth therein.

To secure the Company’s obligations
under the Debenture, the Company granted Hillair a security interest in certain of its and its subsidiaries’ assets in the
Company as described in the Securities Purchase Agreement. In addition, certain of the Company’s subsidiaries agreed to guarantee
the Company’s obligations pursuant to the guaranty agreements.

In connection with the issuance of the
Debenture, the Company issued the Warrant, granting the holder the right to acquire an aggregate of 2,320,000 shares of the Company’s
common stock at $1.35 per share. In accordance with ASC 470-20, the Company recognized the value attributable to the Warrant and
the conversion feature of the Debenture in the amount of $1,871,117 to additional paid-in capital and a discount against the notes.
The Company valued the warrants in accordance with ASC 470-20 using the Black-Scholes pricing model and the following assumptions:
contractual terms of 3.6 years, an average risk free interest rate of 1.42%, a dividend yield of 0%, and volatility of 147.94%.
During the year ended December 31, 2013, the Company amortized $1,871,117 of the debt discount to operations as interest expense.

On April 30, 2014, Hillair agreed to waive
its right to participate in the Company’s future financings for a certain time period and under certain circumstances, as
disclosed in the Company’s Registration Statement on Form S-1, filed with the Securities and Exchange Commission on May 1,
2014.

On May 9, 2014 Hillair elected to convert
the aggregate amount of $104,000 of its Debenture, representing $100,000 of principal and $4,000 in interest into 104,000 shares
of the Company’s common stock.

On June 30, 2014, Hillair elected to convert the aggregate
amount of $104,700 of its Debenture, representing $100,000 of principal and $4,700 of interest, into 104,700 shares of the
Company’s common stock. On August 4, 2014, Hillair elected to convert accrued interest of $127,857 into 127,857 shares
of the Company’s common stock. The outstanding balance for the Debenture was $2,148,835, which includes accrued
interest of $1,432 and $2,347,403 as of December 31, 2014 and 2013 respectively.

On April 9, 2015 Hillair Capital Investments L.P. (“Hillair”)
agreed to further modify the redemption terms of the 8% Original Issue Discount Secured Convertible Debenture (the “Debenture”)
as follows. The Company shall remit $580,000 principal amount of the Debenture on or before May 1, 2015 (originally
due February 1, 2015); in consideration of reducing the conversion price of $100,000 principal amount of the Debenture from
$1.00 to $0.50 per share, the $580,000 principal amount of the Debenture plus interest due May 1, 2015 is extended to August 1,
2015.

Additionally, the modification provides the Company, upon the payment of $150,000 (on or before July 1,
2015) and the reduction of the exercise price of the 2,320,000 warrants issued to Hillair from $1.35 per share to $1.00 per share,
to extend the $580,000 principal amount of the Debenture plus interest due August 1, 2015 and the balance of the principal amount
of the Debenture plus interest due November 1, 2015 until January 15, 2016. Reducing the exercise price of the warrants
would increase the number of warrants granted to Hillair by 601,481.

Other Convertible Notes

On December 14, 2012, February 19, 2013,
and August 14, 2013, the Company entered into Securities Purchase Agreements for the sale of 8% convertible notes in the original
principal amounts of $203,500, $103,500 and $153,500, respectively, with a lender in reliance upon the exemption from registration
under Section 4(a)(2) of the Securities Act.

The Company has identified the embedded
derivatives related to the above described Notes. These embedded derivatives included certain conversion features and reset provision.
The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as
of the inception date of notes and to fair value as of each subsequent reporting date.

At the inception of the notes, the Company
determined the aggregate fair value of $397,325 of embedded derivatives. The fair value of the embedded derivatives was determined
using the Binomial Lattice Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility
of 98.67 to 119.96%, (3) weighted average risk-free interest rate of 0.12 % to 0.17% (4) expected life of 0.76 years, and (5) estimated
fair value of the Company's common stock of $0.60 to $2.14 per share.

F-16

During the year ended December 31,
2013, the Company paid off all the Other Convertible Notes. As such, the Company marked to market the fair value of the debt
derivative at the date(s) of payoff and reclassified the determined aggregate fair values of $366,094 to equity. The fair
values of the embedded derivatives was determined using Binomial Lattice Option Pricing Model based on the following
assumptions: (1) dividend yield of 0%, (2) expected volatility of 116.11% to 147.94%, (3) weighted average risk-free interest
rate of 0.03% to 09%, (4) expected life of 0.25 to 0.52 year, and (5) estimated fair value of the Company's common stock of
$0.55 to 1.40 per share.

During the years ended December 31, 2014
and 2013, the Company amortized and wrote off an aggregate of $-0- and $2,706,869 of debt discount to operations as interest expense,
respectively.

NOTE 12— NOTES PAYABLE

Notes payable as of December 31, 2014 and 2013 are comprised
of the following:

2014

2013

Mortgage Payable

$

7,256,416

$

7,353,398

Note Payable, GE Capital (construction), MRI

121,204

278,287

Note Payable, GE Capital (construction), 2

44,911

100,977

Note Payable, GE Capital (MRI)

1,218,625

1,592,278

Note Payable, GE Capital (X-ray)

142,349

184,001

Note Payable, GE Arm

91,925

114,597

Note Payable, Auto

16,383

22,211

Capital Lease Equipment

25,538

33,511

8,917,351

9,679,260

Less current portion

(732,791

)

(743,787

)

$

8,184,560

$

8,935,473

Mortgage Payable

On August 12, 2011, the Company refinanced
its existing mortgage note payable as described below providing additional working capital funds. The aggregate amount of the note
of $7,550,000 bears 6.10% interest per annum with monthly payments of $45,752.61 beginning in October 2011 based on a 30 year amortization
schedule with all remaining principal and interest due in full on September 16, 2016. The note is secured by land and the building
along with first priority assignment of leases and rents. Tenant rents are mailed to lockbox operated by the mortgage service company.
In addition, the Company's Chief Executive Officer provided a limited personal guaranty.

In connection with the refinancing of the
mortgage note payable, the Company incurred financing costs of $286,723 in the year 2011. The capitalized financing costs are amortized
ratably over the term of the mortgage note payable.

Note Payable — Equipment Financing

On May 21, 2012, the Company entered into
a note payable with GE Healthcare Financial Services (“GE Capital”) in the amount of approximately $2.4 million for
equipment financing.

The Company also currently has two construction
loans outstanding. As of December 2012, the construction loans are payable in 35 monthly payments (first three payments are $nil)
including interest at 7.38%. On May 29, 2012, the Company drew down a total of $450,000 against the first construction loan. On
September 24, 2012, the Company drew down a total of $150,000 against the second construction loan.

The Company entered into equipment finance
leases for a total aggregate amount of $2,288,679, subject to delivery and acceptance of the underlying equipment. All notes and
finance leases have been personally guaranteed by the Company's Chief Executive Officer.

On September 27, 2012, the Company accepted
the delivery of MRI equipment under the equipment finance lease. As such, the component piece accepted of $1,771,390 is due over
60 months and the associated monthly payment is $0 for the first three months and $38,152 per month for the remaining 57 months
including interest at 7.9375% per annum. On March 8, 2013, the Company amended the equipment finance lease to interest only payments
of $11,779 for the first three months and $38,152 per month for the remaining monthly payments.

F-17

On August 22, 2012, the Company accepted
the delivery of X-ray equipment under the equipment finance lease. As such, the component piece accepted of $212,389 is due over
60 months and the associated monthly payment is $0 for the first three months and $4,300 per month for the remaining 57 months
including interest at 7.9375% per annum. On March 8, 2013, the Company amended the equipment finance lease to interest only payments
of $1,384 for the first three months and $4,575 per month for the remaining monthly payments.

On February 25, 2013, the Company accepted
the delivery of C-arm equipment under the equipment finance lease. As such, the component piece accepted of $117,322 is due over
63 months and the associated monthly payment is $0 for the first three months and $2,388 for the remaining 60 months, including
interest at 7.39% per annum.

Note Payable — Auto

On May 21, 2012, the Company issued a note
payable, in the amount of $29,850, due in monthly installments of $593 including interest of 6.99%, due to mature in June 2017,
and secured by related equipment. The outstanding balance on the note payable as of December 31, 2014 was $16,383.

Capital Lease — Equipment

On June 11, 2013, the Company entered into a lease agreement
to acquire equipment with 48 monthly payments of $956.45 payable through June 1, 2017 with an effective interest rate of 14.002%
per annum. The Company may elect to acquire the leased equipment at a nominal amount at the end of the lease.

Aggregate principal maturities of long-term debt as of
December 31:

Amount

Year ended December 31, 2015

$

732,791

Year ended December 31, 2016

7,642,507

Year ended December 31, 2017

523,316

Year ended December 31, 2018 and thereafter

18,737

Total

$

8,917,351

NOTE 13 — RELATED PARTY TRANSACTIONS

As more fully described in Note 9 —
Line of Credit, Related Party CCR of Melbourne, Inc., an entity jointly owned and controlled at that time by the Company's Chief
Executive Officer and Carmen Charles Romandetti, the Chief Executive Officer's father, provided a $500,000 unsecured revolving
line of credit to the Company. The Company accrued $11,153 as related party interest for the year ended December 31, 2013. On November
8, 2013, CCR converted the then outstanding balance of $142,484, representing all of the outstanding related party principal and
interest amount on the loan, into shares of the Company's common stock at a price equal to $0.45 per share for a total of 316,631
shares issued. On November 8, 2013, the Chief Executive Officer relinquished all rights, title to and ownership in CCR to Carmen
Romandetti in consideration of a personal loan made to the Chief Executive Officer by Carmen Romandetti.

As more fully described in Note 10 —
Note Payable, Related Party above, the Company entered into an unsecured loan agreement with HS Real Company, LLC (“HSR”)
on May 17, 2012 for $100,000 at an interest rate of 12% per annum (the “HSR Note”). On August 5, 2012, HSR increased
the principal amount to $250,000, and subsequently HSR advanced an additional $50,000 to the Company, bringing the aggregate principal
amount of the HSR Note to $300,000, all of which was due and payable to HSR on December 31, 2013. The Company paid $27,556 as interest
on the HSR note for the year ended December 31, 2013. Mr. Colin Halpern was both an Affiliate of HSR and a member of the Board
of Directors of First Choice Healthcare Solutions, Inc. On November 8, 2013, the Company paid off the HSR Note, remitting HSR $300,000
for the outstanding principal and interest balance due on the HSR Note.

F-18

On September 7, 2013, the Company acquired
a patent, US 7,789,842 B2, for an orthopedic adjustable arm sling from Donald A. Bittar, the inventor and a member of the Company's
Board of Directors. Based on the independent, third party evaluation of Professional Business Brokers, Inc., the patent was valued
at $286,500. The Company issued Mr. Bittar 636,666 shares of its common stock, valued at $286,500, or $0.45 per share, which was
estimated to approximate fair value of the patent acquired and did not materially differ from the fair value of the common stock
at the time of issuance.

NOTE 14 — CAPITAL STOCK

Preferred stock

The Company is authorized to issue 1,000,000
shares $0.01 par value preferred stock. As of December 31, 2014 and 2013, none was issued and outstanding.

Common stock

The Company is authorized to issue 100,000,000
shares of $0.001 par value common stock. As of December 31, 2014 and 2013, and 17,951,055 and 16,747,248 shares were issued and
outstanding, respectively.

During the year ended December 31, 2013,
the Company issued an aggregate of 533,822 shares of its common stock to officers, employees and service providers at an aggregate
fair value of $383,101. The shares were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities
Act.1

During the year ended December 31, 2014,
the Company issued an aggregate of 200,000 shares of its common stock in conversion of principal due on the line of credit of $150,000.

During the year ended December 31, 2014,
the Company issued 336,557 shares of its common stock in the conversion of convertible notes payable, and accrued interest of $336,557.

During the year ended December 31, 2014,
the Company issued 200,000 shares of its common stock to various consultants and employees for 2013 services rendered, valued at
$166,340 and expensed in 2013.

During the year ended December 31, 2014,
the Company issued an aggregate of 100,000 shares of its common stock for various consulting services rendered at an aggregate
fair value of $124,750.

During the year ended December 31, 2014,
the Company issued 100,000 shares of common stock for future services of $98,000 of which the Company expensed $85,750 in 2014
and will expense $12,250 in 2015. The Company recorded the fair value as prepaid expenses and amortizes the fair value of the shares
issued as stock based compensation during the requisite service period to operations. During the year ended December 31, 2014,
the Company recorded $98,000 as stock based compensation.

During the
year ended December 31, 2014, the Company issued 30,000 shares of common stock for the settlement of financing costs
associated with the Hillair 8% Debenture and included as part of the loan acquisition cost expensed in the year ended
December 31, 2013.

During the year ended December
31, 2014, the Company issued an aggregate of 237,250 shares of its common stock in employee incentives and board compensation
at an aggregate fair value of $237,250. The shares issued to employees were discretionary stock incentives to reward
and retain key employees and not issued as part of the 2011 Incentive Stock Plan.

1 200,000 shares of common stock
were issued in 2014.

F-19

Stock-based payable

The Company is obligated to issue an aggregate
of 477,273 shares of its common stock to officers and consultants for past and future services. The estimated liability as of December
31, 2014 of $537,750 ($1.32 per share) was determined based on services rendered in 2014. The shares were issued in reliance upon
the exemption from registration under Section 4(a)(2) of the Securities Act.

NOTE 15 — STOCK OPTIONS AND WARRANTS

Warrants

The following table summarizes the warrants
outstanding and the related exercise prices for the underlying shares of the Company's common stock as of December 31, 2014:

Warrants Outstanding

Warrants Exercisable

Price

Outstanding

Expiration Date

Weighted Price

Exercisable

Weighted Price

$

1.35

2,320,000

November 8, 2018

$

1.35

2,320,000

$

1.35

$

3.60

1,875,000

December 31, 2016

$

3.60

1,875,000

$

3.60

4,195,000

$

2.36

4,195,000

$

2.36

The warrant to purchase up to 2,320,000
shares of the Company's common stock may be exercised on a cashless basis. The warrant to purchase up to 1,875,000 shares of the
Company's common stock may not be exercised on a cashless basis.

On November 8, 2013, the Company issued
2,320,000 warrants to purchase the Company's common stock at $1.35, expiring November 18, 2018, in connection with the securities
purchase agreement dated November 8, 2013. See Note 11 to the Notes to the Consolidated Financial Statements.

As of December 31, 2014, the Company had
no outstanding options.

NOTE 16 — SEGMENT REPORTING

The Company reports segment information
based on the “management” approach. The management approach designates the internal reporting used by management for
making decisions and assessing performance as the source of the Company's reportable segments. The Company has two reportable segments:
Marina Towers, LLC and FCID Medical, Inc.

Information concerning the operations of
the Company's reportable segments is as follows:

F-20

Summary Statement of Operations for the year ended December
31, 2014:

Marina Towers

FCID Medical

Corporate

Intercompany Eliminations

Total

Revenue:

Net patient service revenue

$

-

$

7,053,603

$

-

$

-

$

7,053,603

Rental revenue

1,483,948

-

-

(434,949

)

1,048,999

Total Revenue

1,483,948

7,053,603

-

(434,949

)

8,102,602

Operating expenses:

Salaries and benefits

12,000

3,733,140

1,016,433

-

4,761,573

Other operating expenses

430,041

1,902,688

-

(434,949

)

1,897,780

General and administrative

89,359

1,168,826

1,176,074

-

2,434,259

Depreciation and amortization

276,666

256,318

19,100

-

552,084

Total operating expenses

808,066

7,060,972

2,211,607

(434,949

)

9,645,696

Net income (loss) from operations:

675,882

(7,369

)

(2,211,607

)

-

(1,543,094

)

Interest expense

(451,962

)

(225,427

)

(189,312

)

-

(866,701

)

Amortization of financing costs

(57,348

)

(25,396

)

-

-

(82,744

)

Other income (expense)

3,000

-

-

-

3,000

Net Income (loss):

169,572

(258,192

)

(2,400,919

)

-

(2,489,539

)

Income taxes

-

-

-

-

-

Net income (loss)

169,572

(258,192

)

$

(2,400,919

)

$

-

$

(2,489,539

)

Summary Statement of Operations for the year ended December
31, 2013:

Marina Towers

FCID Medical

Corporate

Intercompany Eliminations

Total

Revenue:

Net patient service revenue

$

-

$

5,094,358

$

-

$

-

$

5,094,358

Rental revenue

1,473,048

-

-

(424,579

)

1,048,469

Total Revenue

1,473,048

5,094,358

-

(424,579

)

6,142,827

Operating expenses:

Salaries and benefits

12,000

2,537,024

547,261

-

3,096,285

Other operating expenses

385,712

1,389,794

-

(424,579

)

1,350,927

General and administrative

82,186

669,248

953,720

-

1,750,154

Impairment of investment

-

-

450,000

-

450,000

Depreciation and amortization

164,884

353,727

-

-

518,611

Total operating expenses

644,782

4,949,793

1,950,981

(424,579

)

7,120,977

Net income (loss) from operations:

828,266

144,565

(1,950,981

)

-

(978,150

)

Interest expense

(464,250

)

(269,593

)

(2,970,243

)

-

(3,704,086

)

Amortization of financing costs

(57,348

)

-

-

-

(57,348

)

Gain on change in derivative liability

-

-

32,218

-

32,218

Other income (expense)

3,063

-

-

-

3,063

Net Income (loss):

309,731

(125,028

)

(4,889,006

)

-

(4,704,303

)

Income taxes

-

-

-

-

-

Net income (loss)

$

309,731

$

(125,028

)

$

(4,889,006

)

$

-

$

(4,704,303

)

F-21

Summary Statement of Operations for the year ended December
31, 2014:

Marina Towers

FCID Medical

Corporate

Intercompany Eliminations

Total

Assets:

At December 31, 2014:

$

6,726,759

$

4,407,749

$

336,184

$

-

$

11,470,692

At December 31, 2013:

$

6,873,839

$

4,178,091

$

761,367

$

$

11,813,297

Assets acquired

Year ended December 31, 2014:

$

16,758

$

128,467

$

-

$

-

$

145,225

Year ended December 31, 2013:

$

221,902

$

175,786

$

-

$

-

$

397,688

F-22

NOTE 17 - COMMITMENTS AND CONTINGENCIES

Service contracts

The Company carries various service contracts
on its office building for repairs, maintenance and inspections. Certain contracts are long term and non-cancellable. The Company's
future minimum payments under no cancellable service contracts by year from December 31, 2014 forward are approximately: 2015:
$16,835; 2016: $ -0-: total: $16,835. After 2015, we no longer have these obligations. All contracts are now on a month-to-month
basis.

Employment Agreement with Christian Romandetti, CEO

The Company entered a formal five-year
employment agreement (the “Employment Agreement”) with Christian “Chris” Romandetti, dated March 20, 2014
and effective January 1, 2014, to serve as the Company's President and Chief Executive Officer. Pursuant to the terms and conditions
set forth in the Employment Agreement, Mr. Romandetti is entitled to receive an annual base salary of $250,000, which shall increase
no less than 5% per annum for the term of the Employment Agreement.

Mr. Romandetti, upon successfully achieving
annual revenue milestones, is entitled to receive a bonus equal to 10% of his salary when $7.1 million in total annual revenue
is reported in a fiscal year scaling up to a bonus equal to 800% of his salary if and when $100 million in total annual revenue
is reported in a fiscal year. If the Company is unable to pay any portion of the bonus compensation when due because of insufficient
liquidity or applicable restrictions under prevailing debt financing agreements, then, as an accommodation to the Company, Mr.
Romandetti shall be able to convert bonus compensation into shares of the Company's common stock at a 30% discount to the average
closing price during the first calendar month after the end of the fiscal year. Mr. Romandetti will also be entitled to receive
a strategic bonus of $100,000, payable in cash, on the sixth month anniversary of opening each new center of excellence.

Pursuant to the Company achieving specific
financial performance benchmarks established by the Board of Directors, Mr. Romandetti will also be entitled to receive a cashless
option to purchase up to 1 million shares of common stock per year. The exercise price of the options will be the fair market value
of the average closing price of the stock during the first calendar month after the end of the fiscal year. Mr. Romandetti shall
have up to five years from the date of the annual option grant to exercise the option. In addition to the above compensation consideration,
Mr. Romandetti will be entitled to receive annual restricted stock compensation equal to 100% of the total base salary and bonus
compensation. The fair market value of the restricted stock grant shall be determined using the average closing price of the common
stock during the first calendar month after the end of the fiscal year.

In addition, Mr. Romandetti's Employment
Agreement provides that, upon Mr. Romandetti's death, disability, termination for any reason other than “Cause” (as
such term is defined in the Employment Agreement) or resignation for “Good Reason” (as such term is defined in the
Employment Agreement), the Company will pay to Mr. Romandetti twelve months of his annual base salary at the time of separation
in accordance with the Corporation's usual payroll practices.

As of December 31, 2014, Mr. Romandetti, CEO, deferred payment of approximately $107,500 of his compensation.

Elite Financial Group

On October 2, 2013, the Company entered
into a cancelable 12-month agreement to engage the services of Elite Financial Communications Group, LLC. The
terms of the agreement provide for a monthly retainer of $6,000 for the first six months of services, which shall increase to $10,000
per month in months 7-12; and 300,000 shares of the Company's common stock, subject to SEC Rule 144 restrictions, which shall be
earned and issued quarterly as follows: 37,500 shares on January 3, 2014; 37,500 shares on April 3, 2014; 37,500 shares on July
3, 2014; and 187,500 shares on October 3, 2014.

In July 2014, the Company terminated the
Services of Elite, and in accordance with the terms of the agreement, issued an aggregate of 112,500 shares
of common stock at a cost of $125,368. The shares were issued in reliance upon the exemption from registration under Section
4(a)(2) of the Securities Act.

Elite Stock Research Inc.

On September 18, 2014, the
Company entered into a cancelable 4- month agreement (the “Agreement”) to engage the services of Elite Stock
Research, Inc. The Agreement provides for a monthly cash retainer; and 100,000 restricted shares of the Company’s
common stock that were issued in 2014 at a cost of $98,000. The shares were issued in reliance upon the exemption from
registration under Section 4(a)(2) of the Securities Act.

The Company has other consulting agreements
with outside contractors, certain of whom are also Company stockholders. The Agreements are generally expire one year or less.

F-23

Litigation

On or about July 25, 2014,
MedTRX Health Care Solutions, LLC and MedTRX Collection Services, LLC (“MedTRX”) filed a demand for arbitration
with the American Arbitration Association (“AAA”) against FCID Medical, Inc. and First Choice Medical Group of
Brevard, LLC (collectively, “First Choice”). MedTRX claims that First Choice breached an exclusive five year
billing and collection agreement dated as of December 9, 2011 (“Billing Agreement”) by engaging another billing
service on or about June 1, 2014. MedTRX also claims that First Choice failed to pay for services that MedTRX had performed
prior to June 1, 2014 leaving a balance due of $93,280.84. MedTRX claims total damages of “not less than $3 million. On
or about September 15, 2014, First Choice served its Answering Statement and Counterclaims (“Answering
Statement”). In the Answering Statement, First Choice denies all liability to MedTRX due to MedTRX’s numerous
material breaches of the Billing Agreement and asserted two counterclaims for fraudulent inducement and negligence against
MedTRX. First Choice seeks damages of not less than $2 Million against MedTRX. However, no assurance can be given that any
amounts ultimately due by the Company will not have a material impact on the Company’s financial condition.

On April 10, 2014, the Company terminated
the employment of Dr. David E. Dominguez in accordance with the terms of his five (5) year Employment Agreement dated September
26, 2013 (the “Employment Agreement”). Dr. Dominguez, on June 5, 2014, commenced an action against the Company in the
Circuit Court of the Eighteenth Judicial Circuit In and For Brevard County, Florida, alleging that his termination was in breach
of the Employment Agreement. The action was settled by Agreement dated September 4, 2014, with no settlement cost to the Company,
without either party admitting any liability, and the filing of a Joint Stipulation of Dismissal.

From time to time, we may become involved
in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent
uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

NOTE 18 — (LOSS) INCOME PER SHARE

The following table presents the computation of basic and diluted
loss per share:

2014

2013

Net loss available for common shareholders

$

(2,489,539

)

$

(4,704,303

)

Basic net loss per share

$

(0.14

)

$

(0.35

)

Weighted average common shares outstanding-basic

17,249,921

13,529,294

Diluted net loss share

$

(0.14

)

$

(0.35

)

Weighted average common shares outstanding-Diluted

17,249,921

13,529,294

During the year ended December 31, 2014
and 2013, common stock equivalents are not considered in the calculation of the weighted average number of common shares outstanding
because they would be anti-dilutive, thereby decreasing the net loss per common share.

NOTE 19 - INCOME TAXES

The Company has adopted Accounting Standards
Codification subtopic 740-10, Income Taxes (“ASC 740-10”) which requires the recognition of deferred tax liabilities
and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns.
Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and
tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Temporary differences primarily include stock compensation and other equity-related non-cash charges, capitalized financing costs,
the basis difference of derivative liabilities and certain accruals.

Due to the reverse acquisition of First
Choice Healthcare Solutions, Inc. by FCID Holdings, Inc. on December 29, 2010, the net operating loss carry forwards of First Choice
Healthcare Solutions, Inc. incurred prior to that date may not be useable for income tax purposes. As through September 30, 2010
FCID Holdings, Inc. was inactive, and FCID Holdings, Inc.'s active subsidiary is a limited liability company and through September
30, 2010 passed no income through to FCID Holdings, Inc. for federal and state income tax purposes, FCID Holdings, Inc. through
September 30, 2010 incurred no income tax at the corporate level.

F-24

At December 31, 2014, the Company has available
for federal income tax purposes a net operating loss carry forward of approximately $5,410,000 that may be used to offset future
taxable income. Components of deferred tax assets as of December 31, 2014 are comprised primarily of stock based compensation and
debt discounts in connection with convertible notes. No income taxes were recorded on the earnings in 2014 and 2013 as a result
of the utilization of any carry forwards.

Deferred net tax asset consist of the following at December
31, 2014 and 2013:

2014

2013

Deferred tax asset

$

210,000

$

490,000

Less valuation allowance

(210,000

)

(490,000

)

Net deferred tax asset

$

0

$

0

The provision for income taxes consists of the following:

2014

2013

Current tax (benefit)

$

$

Adjustment for prior year accrual

-

-

Net provision (benefit)

$

$

The provision for Federal taxes differs
from that computed by applying Federal statutory rates to the loss before any Federal income tax (benefit), as indicated in the
following:

2014

2013

Federal statutory rate

35.0

%

35.0

%

State income taxes net of Federal benefit

3.6

%

-

38.6

%

35.0

%

The Company files income tax returns in
the U.S. Federal jurisdiction, and various state jurisdictions. The Company is no longer subject to U.S. Federal, state and local,
or non-U.S. income tax examinations by tax authorities for years before 2010.

The Company follows the provision of uncertain
tax positions as addressed in FASB Accounting Standards Codification 740-10-65-1. The Company recognized no increase in the liability
for unrecognized tax benefits. The Company has no tax position for which the ultimate deductibility is highly certain but for which
there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax
benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods
presented. The Company had no accruals for interest and penalties at December 31, 2014 and 2013.

NOTE 20 – SUBSEQUENT EVENTS

Hillair Extension

On January 30, 2015, the Company and Hillair
entered into an Extension Agreement (“Extension”) amending the 8% Original Issue Discount Secured Convertible Debenture
due November 1, 2015, in order to extend the Periodic Redemption due February 1, 2015, in the principal amount of $580,000 (the
“February Periodic Redemption”) to April 1, 2015. See Note 11 to Notes to the Consolidated Financial Statements.

In consideration of the Extension, the
Company issued to Hillair 100,000 shares of common stock and remitted a payment of $30,000. The Extension also provides that, for
an additional $20,000 payment (provided written notice and payment are made prior to March 15, 2015), the Company may request that
the February Periodic Redemption be extended to May 1, 2015.

On March 15, 2015, the Company provided
written notice and remitted $20,000 to Hillair to extend the February Redemption to May 1, 2015.

On April 9, 2015 Hillair Capital Investments L.P. (“Hillair”)
agreed to further modify the redemption terms of the 8% Original Issue Discount Secured Convertible Debenture (the “Debenture”)
as follows. The Company shall remit $580,000 principal amount of the Debenture on or before May 1, 2015 (originally
due February 1, 2015); in consideration of reducing the conversion price of $100,00 principal amount of the Debenture from
$1.00 to $0.50 per share, the $580,000 principal amount of the Debenture plus interest due May 1, 2015 is extended to August 1,
2015.

Additionally, the modification provides the Company, upon the payment of $150,000 (on or before July 1,
2015) and the reduction of the exercise price of the 2,320,000 warrants issued to Hillair from $1.35 per share to $1.00 per share,
to extend the $580,000 principal amount of the Debenture plus interest due August 1, 2015 and the balance of the principal amount
of the Debenture plus interest due November 1, 2015 until January 15, 2016. Reducing the exercise price of the warrants
would increase the number of warrants granted to Hillair by 601,481.

F-25

Employee Incentive Compensation Award

On February 26, 2015 issued 50,000 shares
to Dr. Richard Newman, Medical Director, First Choice Medical Clinic of Brevard, LLC for compensation as Medical Director and as
an employee incentive compensation award.

Payment for Services

On February 27, 2015, issued 30,000 shares
of First Choice’s common stock to WallStreetWriter, LLC as payment for services rendered.

Change in Officers

On March 2, 2015, the Company and Gary
Pickett, Chief Financial Officer, Secretary and Treasurer of the Company, mutually agreed to release Mr. Pickett from the Company’s
employment, effective immediately, to pursue other career opportunities.

Donald A. Bittar, a member of the Company’s
Board of Directors who previously served as the Company’s Chief Financial Officer until his retirement in November 2014,
agreed to assume the post of Interim CFO and continue in this capacity until a new Chief Financial Officer is qualified.